Yes, assets you need in order to live and do your work are not included. A car you need because of a disability is not included.

If you are struggling to pay one or more of your unsecured debts, such as credit cards, personal loans, store credit, overdrafts and utility arrears, you could qualify for a debt management plan.

To qualify for a DRO you should have at least some disposable income to pay your creditors a small amount each month. This means you after paying all your essential payments, you have some money left to pay your creditors. The total amount you owe is less important than your ability to repay your debt.

Essentially, it is all information related to the eligibility criteria. The DRO will need to know about the money you have coming in and the expenses you have as well as calculate the total value of your debt and assets (money you have or things you own).

They will also need to know of your specific activity across the last two years. For example, whether you have given away for free or massively undersold an asset or decided to pay certain creditors over others. If these apply to you, you may not be eligible for a DRO.

This is known as a ‘joint debt’. In joint debts, only your portion of the debt would be eligible for a DRO.

Essentially, it is all information related to the eligibility criteria. The DRO will need to know about the money you have coming in and the expenses you have as well as calculate the total value of your debt and assets (money you have or things you own).

They will also need to know of your specific activity across the last two years. For example, whether you have given away for free or massively undersold an asset or decided to pay certain creditors over others. If these apply to you, you may not be eligible for a DRO.

The money you earn from a job.

Any benefits you’re entitled to from the Government.

Pension.

Rental income.

Any monies received from private sources e.g. a family member.

The advisor needs to know whether your application will hold any weight. Looking at your income helps them understand what disposal income you could save after your debts and expenses are paid. Remember, this has to equal £50 or less.

Money in a savings account and, after that, anything you own that has some value to it. This can be jewellery, land, building, a mobile phone or a car.

Things that are essential to your living and working don’t count as assets for a DRO application, for example, your bed or a piece of equipment you need to do your work. Cars on hire purchase and your wedding ring does not count either.

Pensions only count if you can access them now. If you have a pension but you can’t access it, it does not count. As mentioned earlier, vehicles needed dye to a disability do not count.

Anything you have on hire purchase is not counted as your asset, because you are still paying towards owning it. The terms of your DRO may prohibit you from continuing those payments if they are not deemed as an essential expense.

As with any type of debt solution, a DRO will negatively impact your credit score. This will affect your ability to buy a house, get a loan or a hire purchase.

It will last for six years, before it is removed.

Your bank may shut your account

You may lose any power of attorney you have

Any application to become a British citizen could be negatively impacted

It could affect any tenancy agreement you are apart of

Your DRO advisor will clarify all these with you, as they’re all dependent on your circumstances.

You can borrow up to £500. Anything more will require approval from your Creditors.

You can run a business as a sole trader, as part of a partnership or as a freelancer. You cannot, however, be appointed as a Director of an already Limited Company, set up your own Limited Company or promote and manage any Limited Company, unless you have permission from the court.

If your business is in a different name from the one on the DRO account, you have to use the DRO name with anyone you do business with.

Yes. Your DRO will be available publicly on the Individual Insolvency Register.

Apart from being accepted or rejected, The Insolvency Service may choose to defer the decision.

The Insolvency Service may feel they do not have enough information to make a decision. This will be communicated and you will be asked to supply supplementary information.

Apart from not meeting the eligibility criteria, you could be denied a DRO despite seemingly meeting the criteria because The Insolvency Service has reason to believe that:

You may have stated your debt situation to be deliberately worse than it is become eligible for a DRO e.g. by taking on more debt or getting rid of your assets for nothing or at a fraction of their real value

You lied on your application

You can ask the Insolvency Service, who initially made the decision, to reconsider their application. Maybe you forgot to include some information in the original application. Now is the time to include it.

If the Insolvency Service rejects your application, you can go to the Court.

Throughout any appeals process, your DRO advisor will be guiding you.

You will have to consider other types of debt resolution options.

The Insolvency Service can ask the Court to hand you a debt relief restrictions order (DRRO).

A DRRO means that any restrictions that are in force due to your DRO could now be extended for up to 15 years. If you persist in breaking the restrictions, you could face fines or a prison sentence.

12 months.

You will be sent a notice which details all the restrictions imposed on you during the length of the DRO and your duties and responsibilities. Your DRO advisor will clarify anything for you.

You are protected from all Creditors who are a part of the DRO order except in cases where you owe rent to a landlord or a Controlled Goods Agreement.

If you do come into new money during a DRO due to a pay rise, an inheritance or winning the lottery, you have to let the Insolvency Service know immediately. Failure to do so is an offence and your DRO could be cancelled. You could also be put on a DRRO or, in severe cases, be sent to be prison.

If you find your application has something missing or is incorrect, please let the Insolvency Service know.

You cannot add new debt to a DRO or debt you forgot about. You will need to use an alternative debt solution to deal with those. You can speak to your DRO advisor about changing the terms of the DRO to make the DRO affordable once again.

No, you are only entitled to one DRO every six years.

You will have been given the contact details of the person at the Insolvency Service who is dealing with your DRO. They are known as the Official Receiver. If you’re unsure, speak to your DRO advisor.

Your DRO could be stopped if your financial situation improves or if you are found guilty of breaking the terms of your DRO or proven to have lied on your application.

As always, the circumstances for one individual are different from another. However, if any of the following situations arise, your DRO could be stopped:

You buy a property that is over a £1,000 in value

Your income increases enough that you can now save more than £50 per month.

You’ll be given a written notice explaining why the DRO has been stopped, the date the DRO will end and how you can appeal the cancellation of the DRO.

The Court can hear any appeals. Your DRO advisor will let you know of the options available to you.

Your Creditors cannot go to the Court to get your DRO cancelled without your knowledge. If they have reason to believe that you were never or are now not eligible for a DRO, they can ask the Official Receiver to get it stopped. The Official Receiver will give you a chance to respond to the Creditor before a final decision is made.

Provided your financial situation stayed relatively the same throughout the DRO, your debts are now written off.

Nobody actually tells you that your DRO has ended. Neither the Insolvency Service, the Official Receiver or your DRO advisor. You have to make note of the end date and record it somewhere.

You can always ask the Insolvency Service or an easier way is to check their online register, which holds your DRO details throughout the DRO and three months after it has ended.

Check online now

If your Creditors are asking you to pay a debt that was covered in the DRO, you do not need to pay this. This is because after the DRO ends, the debt ceases to exist. You no longer owe them money so they cannot ask for anything.

Of course, Creditors can still ask you to pay a debt that was not part of the DRO and all other types of debt that do not qualify for a DRO.