Debt Relief Orders UK 2025 — The £90 Route Out of Debt
A Debt Relief Order (DRO) is one of the most effective and least-known debt solutions in England and Wales. For just £90 — a fraction of the £680 bankruptcy application fee — a DRO provides a 12-month moratorium during which creditors cannot pursue you, followed by the automatic write-off of qualifying debts. Following major reforms in 2024 that raised the eligibility thresholds significantly, far more people now qualify than before. This guide explains everything you need to know.
What Is a Debt Relief Order?
A Debt Relief Order is a formal insolvency tool introduced by the Tribunals, Courts and Enforcement Act 2007 and available since April 2009. It is designed for people with relatively modest debts who have very little income and few assets — people who cannot afford bankruptcy but need the same kind of legal protection and debt write-off that bankruptcy provides.
A DRO works in two stages: a 12-month moratorium period, during which creditors listed in the order cannot take enforcement action, charge interest, or contact you to demand payment; followed by automatic discharge — meaning the listed debts are written off — unless the DRO has been revoked during the moratorium.
Unlike bankruptcy, a DRO does not require a court application. It is administered by the Insolvency Service through approved Intermediaries — debt advisers who are specifically authorised to submit DRO applications. The application process is straightforward and the only fee payable is the £90 administration fee, which can be paid in instalments.
The 2024 Reforms — Significantly Higher Thresholds
The DRO thresholds were last increased in 2015 and had become outdated due to inflation and rising living costs. The Government significantly reformed the DRO regime from June 2024:
| Criterion | Before June 2024 | From June 2024 |
|---|---|---|
| Maximum qualifying debt | £20,000 | £30,000 |
| Maximum asset value | £1,000 | £2,000 |
| Maximum monthly surplus income | £50 | £75 |
| Vehicle value exempt | Up to £1,000 | Up to £2,000 |
| Application fee | £90 | £90 (unchanged) |
The increase in the debt threshold from £20,000 to £30,000 is particularly significant — it brings hundreds of thousands more people within the DRO regime who would previously have had to pay £680 to apply for bankruptcy despite having similar financial circumstances.
Full Eligibility Criteria for a DRO
To qualify for a DRO in 2025, you must meet all of the following:
- Total qualifying debts of £30,000 or less — the combined value of all eligible debts must not exceed £30,000
- Monthly surplus income of £75 or less — your income after essential living expenses must not exceed £75 per month
- Total assets of £2,000 or less — excluding a vehicle worth up to £2,000 and household goods (and exempt pension funds)
- Not been subject to a DRO in the last six years
- Not currently bankrupt or subject to an IVA, bankruptcy restrictions order, or debt relief restrictions order
- Resident in England or Wales (or have had a place of residence or carried on business in England and Wales in the last three years)
- Not a company director at the time of the DRO application (though you may have been in the past)
Which Debts Can Be Included in a DRO?
Qualifying debts that can be included in a DRO are most types of unsecured consumer debt:
- Credit card debts
- Personal loans and bank overdrafts
- Utility bill arrears (gas, electricity, water)
- Council tax arrears
- Rent arrears
- Benefits overpayments (in many cases)
- Hire purchase agreements where the item has been returned
Debts that cannot be included in a DRO include:
- Student loans
- Magistrates' court fines and criminal penalties
- Child support payments and family court orders for financial provision
- Social fund loans
- Debts incurred through fraud
- Personal injury damages
The 12-Month Moratorium — What It Means
From the date the DRO is made, a 12-month moratorium applies to all qualifying debts listed in the order. During the moratorium:
- Creditors listed in the DRO cannot take any enforcement action — no bailiff visits, no CCJ applications, no demands for payment
- Interest and charges on listed debts are frozen at zero
- Creditors cannot contact you to demand payment for listed debts
- You are legally protected from enforcement even if creditors refuse to accept the DRO
If your financial situation improves significantly during the moratorium — your income increases above the surplus income threshold, or you inherit or receive assets above the threshold — you must inform the Official Receiver. If the improvement is significant, the DRO may be revoked and you might need to consider bankruptcy instead.
DRO Restrictions — What You Cannot Do
Like bankruptcy, a DRO comes with restrictions that apply during the 12-month moratorium period:
- You cannot obtain credit of £500 or more without disclosing the DRO
- You cannot act as a company director
- You cannot be involved in the formation, promotion, or management of a limited company
- You cannot trade under a different name from that used in the DRO without disclosing the DRO
In cases of dishonesty or financial misconduct, a Debt Relief Restrictions Order (DRRO) can extend restrictions for 2 to 15 years. Most straightforward DROs completed honestly result in discharge after 12 months with no extended restrictions.
DRO vs Bankruptcy — Which Is Better?
For people who qualify for both, a DRO is almost always preferable to bankruptcy due to the much lower cost (£90 vs £680). The main practical differences are:
- DRO: Maximum debt £30,000; virtually no assets; very low surplus income; no OR investigation of assets; cheaper; no IPA possible
- Bankruptcy: No debt limit; can have more assets; can have more income (subject to IPA); OR may realise assets; more complex; Income Payments Agreement may apply for 3 years
If your debts exceed £30,000 or you have assets above the threshold, you will not qualify for a DRO and bankruptcy may be the appropriate route. If your debts are below the threshold and your income is very low, a DRO is almost certainly the better option.
How to Apply for a DRO
- Contact an approved DRO intermediary — you cannot apply for a DRO directly. You must go through an approved intermediary — a debt adviser at StepChange, National Debtline, Citizens Advice, or another approved organisation. The intermediary submits the application on your behalf.
- Gather your financial information — list all your debts with current balances and creditor contact details; all your income sources; all essential monthly expenditure; and all assets with estimated values.
- Complete the DRO application with your intermediary — the intermediary will go through your finances in detail and submit the application online to the Insolvency Service.
- Pay the £90 fee — this must be paid to the Insolvency Service (not the intermediary). It can be paid in instalments if needed before the application is submitted.
- Wait for the decision — the Official Receiver reviews the application. Most straightforward applications are approved within 10 working days. You receive confirmation by email once the DRO is made.
- Do not pay listed creditors during the moratorium — once the DRO is in place, do not make payments to listed creditors. All payments should stop. The moratorium protects you.