Debt Relief Order (DRO): Eligibility, Limits and How It Works

What is a Debt Relief Order?

A Debt Relief Order is a formal insolvency solution for people in England and Wales who can't pay their debts and have very little spare income or assets. It is made by the Official Receiver (part of the Insolvency Service), not a court. The order lasts 12 months. During that time the creditors listed in it can't ask you for payment or take action against you without court permission, and at the end the debts are written off.

Because it is a type of personal insolvency, a DRO is recorded on the public Individual Insolvency Register and on your credit file. It was designed as a simpler, lower-cost route than bankruptcy for people who have nothing that could be sold to pay creditors.

How much debt does a DRO cover?

A DRO can cover qualifying debts of up to £50,000 in total. The limit rose from £30,000 to £50,000 on 28 June 2024. If your qualifying debts are even slightly over £50,000 you can't get a DRO, and bankruptcy or an IVA may be the alternative.

The £50,000 limit counts the debts that can be included in the order, such as credit cards, loans, overdrafts, catalogue debts and household bill arrears. Debts that can't be included (for example student loans or court fines) are dealt with separately; your adviser will tell you how they treat these when working out your total.

How much does a DRO cost in 2026?

A DRO costs nothing. The £90 application fee was abolished on 6 April 2024, so in 2026 there is no fee to the Insolvency Service, and approved intermediaries (such as Citizens Advice and StepChange) do not charge for their help. Older websites may still mention the £90 fee — it no longer applies.

How much do you pay into a DRO?

You pay nothing into a DRO. Unlike an IVA or a debt management plan, there are no monthly payments to the creditors included in the order during the 12 months, and nothing to pay at the end. You do still need to keep paying your ongoing bills, such as current rent, council tax and energy.

DRO eligibility criteria in full

You must meet all of the conditions below. Your adviser checks each one before submitting the application.

1. Qualifying debts of £50,000 or less

See how much debt a DRO covers above.

2. Maximum disposable income: £75 a month

To qualify, you must have £75 a month or less left over after paying your normal household expenses. Your adviser works this out from a budget of your income and essential costs (rent, council tax, energy, food, travel, childcare, phone and similar), using the Standard Financial Statement spending guidelines. Income includes wages, benefits and any pension you're receiving.

3. Assets worth £2,000 or less

Your total assets must be worth £2,000 or less. Assets include cash, money in the bank, savings, valuable items and anything else you own that could be sold.

• Cash at the bank: money in your accounts counts towards the £2,000. Your adviser will look at your balance when you apply, and can explain how money set aside for that month's essential bills is treated.
• Usually not counted: one vehicle worth £4,000 or less, normal household items, clothing, and pension savings that you aren't yet drawing.

Is the home you live in classed as an asset for a DRO?

If you own your home, or a share of it, it counts as an asset — so homeowners usually can't get a DRO. Even a small amount of equity normally takes you over the £2,000 limit. A rented home (council, housing association or private) is not an asset, so renting doesn't stop you qualifying. If you own property, ask an adviser about bankruptcy, an IVA or a debt management plan instead.

4. A vehicle worth £4,000 or less

You can keep one vehicle worth up to £4,000, and it isn't counted in the £2,000 asset limit. A vehicle specially adapted for a disability can be worth more. A car on hire purchase or conditional sale belongs to the finance company until it's paid off; the finance debt can be listed, but the lender would normally be able to take the car back, so talk this through with your adviser.

5. No DRO in the last 6 years

You can't apply if you've had a DRO in the last 6 years. You also can't be currently bankrupt, in an IVA, facing a bankruptcy petition, or subject to a bankruptcy or debt relief restrictions order.

6. A connection with England or Wales

You must have lived, had a property or worked in England or Wales at some point in the last 3 years. Scotland has a different scheme (the Minimal Asset Process, a form of sequestration), and Northern Ireland has its own DRO scheme with different limits.

7. No recent transfers of assets

You shouldn't have given away assets, sold them for less than they're worth, or paid one creditor in preference to others in the period before you apply (normally the last 2 years). Tell your adviser about anything like this — it doesn't always rule you out, but it must be disclosed. Giving false information on a DRO application is a criminal offence.

Which debts can go in a DRO?

Some benefit-related debts (for example Social Fund loans and some advances) have special rules about whether they can be recovered from benefits during and after a DRO. Your adviser will tell you how they apply to you.

Can TV licence arrears go in a DRO?

A fine from a court for watching without a TV licence cannot be included in a DRO — court fines are always excluded and must still be paid. In practice there usually isn't a separate "TV licence debt" to include: if you stop paying a licence instalment plan, the licence is cancelled rather than turned into a loan. If you need a licence, keep it paid; if you can't afford it, tell your adviser so it's built into your budget.

Does a DRO mean I don't have to pay my rent arrears?

Rent arrears can be included, and the landlord can't then chase you for them as a debt. But you must keep paying your current rent. A landlord may still be able to take possession action in some circumstances, especially if new arrears build up, so get advice before you apply if you're worried about your tenancy — see our guide to eviction and rent arrears.

Joint debts

A DRO only protects you. If a debt is in joint names, the creditor can still ask the other person to pay the full amount.

How to apply for a DRO

You can't apply for a DRO on your own. Applications are made online through an approved intermediary — a debt adviser authorised to submit DROs to the Insolvency Service. The help is free.

1. Contact a free debt advice service

   Use the MoneyHelper debt advice locator, or contact StepChange (0800 138 1111), Citizens Advice or a local advice centre. They'll check whether a DRO is right for you or whether another option is better.

2. Gather your paperwork

   Recent bank statements, payslips or benefit letters, bills, and letters or statements from each creditor showing what you owe.

3. Work through your budget and debts

   The adviser builds an income and expenditure statement, lists your debts and assets, and confirms you meet every condition.

4. The adviser submits your application

   Once you've checked and agreed the details, the intermediary submits it online. There is no fee to pay.

5. The Official Receiver decides

   The Official Receiver checks the application and may ask questions. If it's approved, the DRO is made and the 12-month period starts. Creditors are told, and they can object on limited grounds (for example if they think you don't meet the conditions).

Do Citizens Advice help with DROs?

Yes. Citizens Advice can check whether you qualify for a DRO and many local Citizens Advice offices are approved intermediaries who can submit the application for you, free of charge. If your local office doesn't do DROs, it will refer you to one that does. You can call the Citizens Advice Adviceline on 0800 144 8848 (England) or 0800 702 2020 (Wales), or use their website. StepChange and many other free advice agencies can also arrange DROs.

What happens during the 12 months?

For most people, day-to-day life carries on as normal. The creditors in the DRO should stop contacting you about payment, and you don't pay them anything. You keep paying your ongoing costs as usual.

Rules you must follow

• You can't borrow more than £500 without telling the lender you have a DRO.
• You can't act as a company director, or be involved in forming or managing a company, without court permission.
• If you run a business, you can't trade under a different name without telling people you deal with the name your DRO was made in.
• You must tell the Official Receiver about changes in your circumstances, such as a rise in income or receiving money or property.

What if my income goes up during a DRO?

You must tell the Official Receiver if your income increases or your expenses fall. If your spare income goes above £75 a month, the DRO can be revoked (cancelled), which means the debts are no longer written off and creditors can chase them again. The same applies if you receive money or assets — for example an inheritance, a gift or a compensation payment — that take you over the £2,000 asset limit. Talk to your adviser straight away if your situation changes; they can explain your options.

Debt Relief Restrictions Orders

If the Official Receiver finds you've been dishonest or to blame for your debts (for example hiding assets, giving false information or running up debts you knew you couldn't repay), you can be given a Debt Relief Restrictions Order. This extends the restrictions for between 2 and 15 years.

What happens when the DRO ends?

At the end of the 12 months you are "discharged" and the debts included in the DRO are written off. You don't need to do anything for this to happen. The restrictions end (unless you have a restrictions order), and your entry is removed from the Individual Insolvency Register 3 months after the DRO ends.

The DRO stays on your credit file for 6 years from the date it was made. The debts in it will normally show as defaulted or settled through insolvency. Building your credit back up takes time: keep up with bills and rent, register to vote at your address, and check your credit reports to make sure the DRO and included debts are recorded correctly.

Can I get another DRO if I've had one within 6 years?

No. You can't get a new DRO if you've had one in the last 6 years. After 6 years have passed since your previous DRO was made, you can apply again if you meet all the other conditions at that time. If you need help sooner, an adviser can look at other options, such as a debt management plan, token payments, Breathing Space or bankruptcy.

If you don't qualify for a DRO

An adviser will always look at your whole situation — sometimes a short wait (for example while a car loses value) or dealing with an asset first means you qualify later. Don't move or give away money or property to try to qualify without advice.

Frequently asked questions