The debt Relief Order is the kind of reprieve that one gets when they are not able to pay their debts especially the people who are earning very little money. The good thing about the relief is that it is an alternative to declaring bankruptcy. Here are some of the frequently question which are asked about the Debt Relief Order (DRO).
What is Debt Relief Order?
The Debt Relief Order commonly is a way of helping one deal with their debt in a less formal way. The DRO is considered the most affordable alternative to bankruptcy because the liability is removed and the applicant becomes debt free. It is most suitable for the people who have a debt of less than 20,000 pounds.
Who is Eligible?
The people who are eligible for the DRO are those who are living in England, Northern Ireland and Wales for the last three years. These individuals have to owe less than 20,000 pounds if they live in England and less than 15,000 pounds if they live in Northern Ireland. Another requirement is that one has to have assets which are not more than 1000 pounds, do not own a house and cannot afford more than 50 pounds in a month. The people who are currently bankrupt or have an ongoing petition are not allowed to have a DRO. If you had requested for a DRO within the last six years, then you are not allowed to apply again until after the six year wait period.
How long does the application take?
The application for the DRO takes a pretty short time. This is because once you have determined your eligibility the next thing which is required is to fill the application and submit it. The process typically takes a couple of hours. This is after the intermediary has taken up the issue and verified that everything checks out. Then the finalization is just a matter of hours either through the phone or face to face interaction. You may be denied the DRO if you have received a det restriction order.
How much do I have to pay
There is no monthly payment that is required once one had applied for the DRO. However there is usually a one-time fee of 90 pounds which is payable to the official receiver. This amount is required during the initiation process. Once this is done there is no other payment which is made if the condition of the applicant does not change. However this is subject to change when the financial circumstance of the applicant changes.
What is DRO duration?
The duration of DRO is typically 12 months whereby there is no change in the financial circumstance of the applicant. Then the creditor is obliged to write off all the outstanding balances.
After the passage of 12 months the applicant is legally considered debt free. However the DRO will remain in your financial documents and may affect future credit applications.