A DRO is one of several formal insolvency solutions in England and Wales, and it is still a serious step with real consequences. The rules changed on 28 June 2024, and a lot of the guidance still in circulation is out of date.
The 2024 changes moved the debt limit from £30,000 to £50,000 and the motor vehicle limit from £2,000 to £4,000 (GOV.UK: How to get a Debt Relief Order). The £90 application fee was removed on 6 April 2024. Whether a DRO is right for any individual is a separate question from whether they now fall inside the thresholds.
This page covers England and Wales. It is general information, not personal financial advice or regulated debt advice, and not legal advice. To apply for a DRO you must work with an approved intermediary.
Quick answer
What is a Debt Relief Order?
A DRO is a formal insolvency solution for people in England and Wales who owe under £50,000, have £75 or less spare income a month, own less than £2,000 in assets and no single vehicle worth £4,000 or more. If approved, most included debts are frozen for 12 months (the moratorium) and then written off. It is free to apply, but only through an approved intermediary such as Citizens Advice, and it stays on your credit file for six years. See Who can apply in 2026.
Who can apply for a DRO in 2026
To qualify for a DRO under the current thresholds, all of the following must be true. The Insolvency Service technical guidance for official receivers, chapter 60 sets these out for the officials who actually approve DROs.
- Your total qualifying debts are under £50,000 (raised from £30,000 on 28 June 2024).
- Your spare income after normal household expenses is £75 per month or less.
- Your gross property (savings and valuables) is worth less than £2,000 in total.
- No single motor vehicle you own is worth £4,000 or more (raised from £2,000 on 28 June 2024). A specially adapted disability vehicle may be disregarded above that limit.
- You live, work or ran a business in England or Wales at some point in the last three years.
- You have not had a DRO in the last six years that was not revoked.
- You are not already bankrupt, in an IVA, or subject to certain other insolvency restrictions.
In plain English: the eligibility test is a set of hard numbers, not a judgement. All of the criteria above must apply. Falling inside the thresholds does not automatically make a DRO the right answer. It just means the DRO route is open to consider alongside an IVA, bankruptcy or an informal arrangement.
Before you speak to an approved intermediary
Work out your realistic spare income first
The Budget Planner walks through income and essential expenses so you know whether you are likely to fall under the £75 monthly spare income line before the DRO conversation starts. No sign-up, free to use.
How to apply for a DRO
You cannot apply for a DRO yourself. Every application in England and Wales has to be submitted to the Insolvency Service through an approved intermediary. National Debtline's DRO guide explains that the intermediary is a specialist adviser authorised to send the application and cannot charge you for the service.
Approved intermediaries are usually based at organisations such as Citizens Advice, StepChange, PayPlan and National Debtline. Their job is to check your circumstances, help you compile a full budget and creditor list, and submit the application. The official receiver at the Insolvency Service then decides whether to approve the DRO.
To keep the process short, gather this before your first appointment:
- A full list of every debt, with balances and account numbers.
- Recent statements or letters from each creditor.
- Payslips, benefit letters or self-employed income evidence for the last three months.
- Bank statements for the last three months.
- A rough monthly budget showing rent or mortgage, council tax, utilities, food, transport and other essentials.
- Evidence of any assets: savings accounts, valuables over £500, vehicle details, pension arrangements.
- Details of any payments made to creditors, or valuables given away or sold, in the last two years.
Person at risk of violence (PARV) order: timing matters
The DRO entry on the public Individual Insolvency Register normally includes your name and address. If publishing your address would put you or a family member living with you at risk of violence, a person at risk of violence (PARV) order can prevent that. The chapter 60 guidance is explicit that the application to withhold the address must be made before the DRO application is submitted, with a witness statement and supporting evidence.
Put another way, if you file the DRO first and the PARV second, the IIR entry may already be public by the time the court protects the address. Tell the approved intermediary about any safety concern at first contact.
What happens during the 12-month moratorium
Once the DRO is approved, a 12-month protected period begins. This is the moratorium set out at Part 7A of the Insolvency Act 1986. During those 12 months:
- Listed creditors cannot ask you for payment.
- Listed creditors cannot take further enforcement action such as court claims or bailiffs on included debts.
- Interest and charges on included debts are frozen.
- You must keep paying regular commitments that are not part of the DRO, such as rent, mortgage, council tax, utilities and food.
Creditors are still legally required to send certain statutory notices during the moratorium, such as annual statements, arrears notices and default notices under the Consumer Credit Act. Receiving those does not mean anything has gone wrong. What you should not receive is demands for payment on an included debt. If one arrives, tell the creditor about the DRO in writing and copy the official receiver or your approved intermediary.
The £500 credit rule is a criminal offence, not a guideline
The chapter 60 guidance is blunt: during the moratorium it is a criminal offence to obtain credit of £500 or more, alone or jointly, without disclosing that you are subject to a DRO. It is also an offence to trade under a name other than the DRO name without telling everyone you do business with, and to act as a company director without the court's permission.
In plain English: if you have a DRO and you take out an overdraft, catalogue account, buy now pay later plan or any other credit that reaches £500 without telling the lender about the DRO, you are committing an offence. This is not a soft rule. It is a prosecutable one.
Which debts a DRO covers and which it does not
Most common consumer debts count as qualifying debts and can be included in a DRO, as long as the total is under £50,000. That covers:
- Credit cards, store cards and catalogue accounts.
- Personal loans, payday loans and doorstep loans.
- Overdrafts.
- Buy now, pay later balances.
- Benefit overpayments, including Universal Credit and Tax Credit overpayments.
- Utility arrears (gas, electricity, water).
- Rent arrears (though this can affect your tenancy, so always mention it to the intermediary).
- Money owed to family or friends, if you list them properly.
- Some HMRC debts.
Certain debts are treated as excluded debts. They must be listed on the application but cannot be written off by the DRO. You remain liable to pay them in full during and after the moratorium.
- Magistrates' court fines and criminal confiscation orders.
- Child maintenance, CSA and CMS arrears.
- Student loans.
- Social Fund budgeting loans and crisis loans.
- Some personal injury awards owed to others.
- Secured debts, including mortgages and secured loans, unless the creditor agrees to release the security.
Assets, vehicles and the £2,000 rule
The £2,000 gross property limit trips people up because they include things that do not count and forget things that do. The Insolvency Service technical guidance and the National Debtline guide spell out the practical picture.
A single motor vehicle up to £4,000 is disregarded
Since 28 June 2024, a single domestic motor vehicle worth less than £4,000 is left out of the asset calculation entirely. Only one vehicle per debtor can be disregarded. A vehicle on hire purchase is not treated as your asset for the asset test, but the monthly repayments count as a reasonable expense.
A specially adapted vehicle for a debtor with a physical impairment that has a substantial and long-term adverse effect on day-to-day activities may be disregarded even where it is worth £4,000 or more. There is no separate cap in that case.
Pension pot value does not count, but pension income does
Regular payments received from a pension are treated as income when working out the £75 spare income figure. The value of an HMRC-approved pension pot is not counted toward the £2,000 asset threshold. A very small number of non-HMRC-approved pensions do count as an asset.
What that means in practice: someone with a £45,000 pension pot but only £50 of monthly pension income can still meet both the asset and spare income tests on the numbers. That is a widely misunderstood rule and it changes the eligibility picture for a lot of readers who assume any pension takes them out of scope.
Disability lump-sum backpay is disregarded from the £2,000
If backdated benefit lands as a lump sum, it usually counts toward the £2,000 asset test. The National Debtline DRO guide sets out the important exception: lump-sum payments are disregarded if they relate to a benefit helping with the added costs of disability, or a disability premium within such a benefit. Examples include Personal Independence Payment (PIP), Disability Living Allowance (DLA) and Attendance Allowance.
Put another way, a PIP backpay lump sum does not tip you over £2,000, but a Housing Benefit backpay lump sum would. Backdated benefit paid in monthly instalments always counts as income for the £75 test.
How the £75 spare income test actually works
The £75 monthly spare income figure is not measured against the reader's own view of what is left. It is measured against a formal budget of income and normal household expenses, worked through by the approved intermediary against the standards the Insolvency Service applies. That budget covers rent or mortgage, council tax, utilities, essential food, essential travel, childcare, insurance, disability costs and any special circumstances such as care costs.
What that means in practice: readers who think they have £120 spare because they overspend on lifestyle categories often come in under the £75 line once the standard household budget is applied. The gap between someone's own spare-cash estimate and the DRO-relevant figure is often significant, in either direction.
Debt Relief Restrictions Order (DRRO): the 2 to 15 year risk most readers miss
A DRO is designed to be consequence-limited if the debtor was honest and unlucky rather than reckless. Where the official receiver finds otherwise, a Debt Relief Restrictions Order (DRRO) can extend DRO-style restrictions for between two and fifteen years past the normal 12-month DRO period. A voluntary version, called a Debt Relief Restrictions Undertaking (DRRU), has the same effect without a court hearing.
The grounds are listed in the Insolvency Act 1986 at Schedule 4ZB, paragraph 2. In plain English, the official receiver may seek a DRRO or DRRU if they find:
- You were not honest and open about your finances before or during the DRO.
- You behaved irresponsibly in incurring the debts.
A DRRO or DRRU keeps the £500 credit disclosure rule, the director disqualification and the business-name rule in force for its full length. It also keeps your entry on the Individual Insolvency Register for the full life of the order plus a further three months. That is why full disclosure to the approved intermediary matters more than any other single thing in the application.
Not sure a DRO is your right route?
See the paid support options first
A Letter Audit explains what a specific creditor letter or offer actually means. A Clarity Call is a 10-minute review of the wider picture, with no pressure to commit to a specific solution.
Public register and credit file: two different timelines
DROs create two separate public records with two very different lengths. Readers often confuse them and make the wrong plan.
Individual Insolvency Register: about 15 months
Your details go on the Individual Insolvency Register while the DRO is active. The entry is removed three months after the DRO period ends. Total public exposure on the register is therefore around 15 months (12 months of DRO plus three months). The register is free and publicly searchable. Employers, landlords and lenders can look you up.
Credit file: six years from the date of the DRO
Separately, the DRO appears on your credit file for six years from the date the DRO was approved, whether the moratorium is still running or ended years ago. During those six years mainstream credit, mortgages and some financial products may be refused. Some lenders may still ask about historic insolvency after the six years are up, especially for larger borrowing like mortgages.
What that means in practice: employers or landlords doing an IIR check will not see the DRO after around 15 months, but any lender pulling a credit file will see it for six years. Any credit rebuild timeline is governed by the six-year clock, not the 15-month one.
Joint debts: you cannot apply jointly with a partner
A DRO is always in one person's name. If a couple both need a DRO, each partner must apply separately and each is assessed separately against the £50,000, £75 and £2,000 tests. If only one partner qualifies, the other partner remains fully liable for any joint debt they had together. The DRO does not clear the other partner's obligation.
When a DRO is probably not right
Meeting the eligibility test does not mean a DRO is the right answer. It may be the wrong tool if:
- Your total debts are over £50,000, even by a small margin. The DRO is refused if this is wrong at any point in the moratorium.
- Your assets total more than £2,000 once savings and valuables are added up.
- You own a single vehicle worth £4,000 or more, and it is not a qualifying disability-adapted vehicle.
- You have spare income of more than £75 a month after normal household expenses. A Debt Management Plan, an informal arrangement or Breathing Space may be relevant instead.
- You need protection for secured debts such as a mortgage, or your main problem is a secured loan.
- You are likely to receive an inheritance, redundancy payment or other lump sum during the next 12 months that would push you over the asset limit.
- Your tenancy, employment role or immigration position could be materially harmed by an insolvency entry.
If you do not qualify for a DRO, it does not mean you are out of options. It means a different solution, such as Breathing Space, token payments, DMP, IVA or bankruptcy, may fit your situation better.
Alternatives to compare before applying
Every serious debt decision should be a comparison. The GOV.UK options page covers the full menu; the notes below are for readers weighing whether the DRO route is right versus each alternative.
Breathing Space (Debt Respite Scheme)
The Breathing Space scheme gives up to 60 days of legal protection from creditor action in England and Wales while you decide what to do next. A separate mental-health-crisis version lasts for the length of the qualifying treatment plus 30 days. Breathing Space is not itself a debt solution. It is protected time to organise the decision. It is often the right first step before choosing between DRO, DMP, IVA or bankruptcy.
Debt Management Plan (DMP)
A DMP is an informal repayment arrangement, not an insolvency solution. It may fit if your spare income is above the £75 DRO threshold and your unsecured debts can be cleared in a realistic timeframe. Free-sector DMP providers do not charge you. Fee-charging firms are FCA authorised but their fees reduce what reaches creditors each month.
Individual Voluntary Arrangement (IVA)
An IVA is a formal insolvency solution, typically running for five or six years. It has real fees over its lifetime and it can fail. IVAs are appropriate for a narrower group of people than the industry sometimes suggests, so the fit needs checking carefully against alternatives.
Bankruptcy
Formal bankruptcy may fit if your debts are over £50,000, your assets are over £2,000, or your circumstances rule the DRO out. Bankruptcy has its own asset consequences: see Can I Keep My Home if I Am Made Bankrupt? for how the family home is treated.
Token payments
If your spare income is genuinely nil, token payments of £1 to £5 per creditor per month can keep accounts active and demonstrate ongoing engagement while circumstances are reviewed. This is a holding pattern, not a solution.
Questions to ask your approved intermediary before you apply
Before your intermediary submits the DRO application, satisfy yourself on each of the following in writing or notes from the appointment. Every one of these has caught DROs out later.
- Have you listed every single debt, including any old ones that may be statute barred, any joint debts, and any money owed to family or friends? Missing a debt cannot usually be corrected after the DRO starts.
- Are any of the listed debts actually excluded debts (magistrates' fines, student loans, child maintenance, criminal confiscation)? These stay payable in full.
- Have all my assets been counted correctly, and does the £2,000 gross property test pass? What about savings, valuables, insurance policies, and any pension that is not HMRC approved?
- Is my vehicle definitely under £4,000, or is it a disability-adapted vehicle that qualifies for the special disregard?
- Does my monthly spare income come in at £75 or less on the standard Insolvency Service budget, not on my own quick estimate?
- Is my address handling right? Do I need a PARV order because of a safety concern?
- Am I likely to receive an inheritance, redundancy, insurance payout or other lump sum in the next 12 months that could revoke the DRO?
- How will the DRO affect my tenancy, employment role, professional membership or immigration position?
FAQs · Debt Relief Orders in England and Wales
How much does a DRO cost in 2026?
Nothing. The £90 application fee was abolished on 6 April 2024, so the DRO application is now free. The approved intermediary who handles your case also cannot charge you.
Can I apply for a DRO myself?
No. Every DRO application in England and Wales must be submitted through an approved intermediary. These are trained debt advisers at organisations such as Citizens Advice, StepChange or National Debtline, and they are not allowed to charge for the DRO service.
What are the DRO limits for 2026?
Your total debts must be under £50,000, your spare income after normal household expenses must be £75 or less per month, your assets must be worth under £2,000 in total, and any single motor vehicle you own must be worth less than £4,000. The £50,000 and £4,000 figures were increased from £30,000 and £2,000 on 28 June 2024.
How long does a DRO last?
A DRO normally lasts 12 months, called the moratorium period. During those 12 months included creditors cannot ask you for payment, and interest and charges are frozen. At the end of the 12 months, qualifying debts listed in the DRO are usually written off.
How does a DRO affect my credit file?
A DRO stays on your credit file for six years from the date the DRO was approved, regardless of when the 12-month moratorium ends. You can be refused mainstream credit, mortgages and some other financial products during that period. Some lenders may ask about historic insolvency even after the six years are up.
Will my name go on a public register?
Yes. Your details appear on the Individual Insolvency Register while the DRO is active and for three months after it ends, giving a total public listing period of around 15 months. If publishing your address would put you or a family member at risk of violence, a PARV order can be sought before the DRO application is submitted.
Which debts cannot be written off by a DRO?
Excluded debts include magistrates' court fines, child maintenance and CSA or CMS arrears, student loans, budgeting and crisis loans, criminal confiscation orders, some personal injury awards and secured debts such as mortgages. These still need paying in full.
What is a Debt Relief Restrictions Order (DRRO)?
A DRRO extends DRO-style restrictions for between two and fifteen years after the DRO ends. The official receiver can apply for a DRRO where they find the debtor behaved irresponsibly or was not honest and open about their finances before or during the DRO. Grounds are set out at Insolvency Act 1986, Schedule 4ZB, paragraph 2.