Debt Relief Order (DRO)
On 6th April 2009, the Government introduced a low cost, out of court, debt solution targeted at people with low income and little or no assets. The Debt Relief Order is available for individuals who owe less than £15,000, have assets worth less than £300 and have surplus monthly income of less than £50. It allows people who cannot repay their debts the opportunity to become debt free within a year.
It is an alternative to bankruptcy as it offers a fresh start for people at a cost of £90, which is significantly less than the cost of bankruptcy, which is currently £600. The CAB has been authorised by the Government as an intermediary to deal with people applying for a DRO. So for more information on this debt solution, contact either your local CAB or Dunion & Co.
Contact us now on: 01782 366040 or complete our 'confidential advice enquiry form’, we guarantee complete confidentiality at all times.
Debt solutions with impartial, expert and confidential advice
Bankruptcy
Bankruptcy is often seen as the 'last resort' as a means of dealing with personal debt problems, which is why professional advice must be sought by anyone considering this option. However, in certain circumstances, it can be the appropriate solution.
Essentially, anyone who goes bankrupt gets rid of all their unsecured debts BUT this option can have serious consequences. For example, you could lose your home if it has equity in it. Other assets will also be sold to repay some monies back to your creditors. If you have surplus income, you may be required to pay monthly contributions from income for three years.
Advantages of Bankruptcy
- All unsecured debt will be written off, generally within one year
- If you live in rented property, and your rent is paid up to date, you should be able to remain in the property
Disadvantages of Bankruptcy
- Control of your assets passes to your Trustee in Bankruptcy
- Cannot be a director of a limited company or involved in its management
- Your job could be at risk; certain trades and professions will not employ bankrupts
- Cannot obtain credit over £500
- We will advise you on all the advantages and disadvantages of bankruptcy in order for you to make an informed decision
- We will complete all the necessary paperwork for you
- We will arrange your appointment at the Court
- We will explain what happens when you have your interview with the Official Receiver's office
- We will be on hand to offer you further advice throughout your period of bankruptcy
Compare the advantages and disadvantages of the various debt solutions below:
| Solution | Advantages | Disadvantages |
|---|---|---|
| IVA | Your monthly payments will be reduced and are based on affordability Be debt free, usually within 5 years Fees are paid from your contributions |
You cannot get credit during the IVA Your credit rating will be affected for a further year after the IVA has finished Home owners may be required to Release equity from their property |
| DMP | Your monthly payments will be reduced Interest/charges may be frozen If you are a home owner, you will be able to retain your property |
Your debts will not be reduced You may be paying your debts for a longer period of time; there is no fixed timescale Creditors may continue to contact you |
| Bankruptcy | Your debts will be written off within one year | You may be forced to sell assets such as your property You may be ‘barred' from certain jobs/Professions You may be required to contribute to your debts for three years by way of an Income Payments Order |