The Tribunals, Courts and Enforcement Act 2007 of the United Kingdom launched in April 6 2009 the debt relief order (DRO) as a new form of dealing bankruptcy. This DRO is the latest and cheaper way of debt relief intended to help people who are financially excluded from any of the current resolution procedures. This is planned to those who have nothing to offer their creditors in terms of income and assets.
The application for DRO can be done without attending the court hearing but paying the fee of £90, which sometimes may be paid in installment. This is granted by the Insolvency Service to debtors who have debts of less than £15,000 and a disposable income of less than £50.
The DRO normally lasts for one year, and within this period, none of your creditors will take action against you and get your money back. Fortunately at the end of this period you’ll be free from all of your debts listed in the order.
The following are the requirements for a DRO which is planned to give debt relief for the people in England and Wales:
At the time of application for DRO, The debtors must not be involved in another insolvency procedure such as:
An unresolved bankrupt
An existing Individual Voluntary Arrangement
A present Bankruptcy Restriction Order or Undertaking
A recent Debt Relief Restriction Order or Undertaking
A provisional order
An existing pending debtors’ bankruptcy petition but they’ve not been referred to the DRO procedure.
A present pending creditors’ bankruptcy petition against the debtor but has not been permitted entry into the DRO process.
When you have decided that you need a DRO, you should consult your debt advisor as this can be completed only by an intermediary. If you seek the assistance of our company, Debt Consolidation 247, we’ll give you free full service until completion.
Our first task is to review your information and check whether you meet the conditions. If we found that you’re qualified we will apply for a DRO online and pay the cost of the order at £90 on your behalf.
Upon the receipt of the application and the payment, an Official Receiver will thoroughly evaluate it. He/she may make the order without the participation of the court if it appears that the applicant meets the requirement.
However if the Official Reviewer discovers that there are information which disqualifies the debtor, the application will be refused. In cases that the information was known after the issuance of the DRO, the Official Receiver may revoke the DRO without reference to the court. The result of a revoked DRO will open the way for the creditors to take action on the debtor. Furthermore the debtor cannot apply for another DRO within six years.
When you plan to get DRO it is important that you should know its pros and cons as follows:
All personal debt is written-off.
DRO is finished in just 12 months.
Debtors can’t be harassed by creditors.
There is no monthly repayment.
Simplicity of procedure as it uses an intermediary instead of Official Receiver.
Bad credit rating will be encountered by the debtors.
Access to credit over £500 will be difficult.
Inappropriate solution for people who have unsettled bankruptcy, BRO and IVA.
This is applicable only to debts up to £15,000.
Improper for homeowners as required assets must not exceed £300.
Inheritance money will form part of the DRO.
Debtors with DRO will appear on the publicly government insolvency register.
DRO application can only be made once in every six years.
The following are some facts about DRO:
DRO was passed in April 2009 by the government to rescue the financial situation of common people. This is considered as the legitimate and cheap form of dealing bankruptcy.
The Insolvency Service foresees that in the first year of DRO availability there will be 21,000 applications and projected to reach 43,000 applications in the following year.
The DRO is intended to help those people who have income lower than £15,000, assets not to exceed £300, and monthly disposable income of £50.
This DRO is using the least complicated debt relief solutions without the need for the debtors to appear in the court.
With DRO, debtors are protected from harassment actions by creditors.