DRO’s were created as a new form of insolvency in April 2009, and were originally for those people who had debts, no surplus income after allowed expenses, and no assets, as a way to get out of debt.
DRO’s were similar to bankruptcy, but for those with less debt, and no assets. DRO’s were also cheaper to enter into, £99 as opposed to £680 to go bankrupt.
Debt Relief Orders have changed slightly over the years as the ceiling or total amount of debt you could have to qualify for one had been raised to £20,000. It was felt that by raising the amount of debt you could include in a DRO, it would allow more people in debt to get out of debt.
Effective as of June this year, 2021, Debt Relief Orders have changed once again.
These changes are:
- The total amount of debt allowed to be included has gone up from £20,000 to £30,000.
- You can have a car now valued at £2,000, where it was previously £1,000.
- You can have “general assets” now of £2,000, where it was £1,000.
- You can have a surplus income now of £75, where it had previously been £50.
These are significant changes and increases.
It is believed these changes will allow over 10,000 or more people to get out of debt using a DRO each year.