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Debt Relief Order (DRO)

A DRO is a legal agreement that stops creditors from contacting you and prevents them from taking any legal action against you to recover the debt. Once a DRO is in place, it lasts for 12 months, and during this time, you won’t have to make any payments towards your unsecured debts.

At the end of the 12-month period, your debts will be written off, and you will be debt-free. However, it’s important to note that not all debts can be included in a DRO, such as secured debts like mortgages or hire purchase agreements.

 

Our debt advisors can help you determine if you qualify for a DRO and provide guidance on the steps you need to take to apply for one. We can also assist you in filling out the necessary forms and provide you with ongoing support throughout the process.

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Advantages Of A DRO

  • Affordable payments: With a DRO, you don’t have to make any payments towards your unsecured debts for 12 months. This can give you much-needed breathing space to get your finances back on track.
  • Protection from legal action: Once a DRO is in place, creditors are not allowed to take legal action against you to recover the debt. This means you can have peace of mind knowing that you won’t face any court proceedings or enforcement action.
  • Debt write-off: At the end of the 12-month period, your unsecured debts will be written off. This means you will no longer have to repay them, and you will be debt-free.
  • Improved credit rating: While a DRO will appear on your credit file for six years, it can still improve your credit rating. Once the DRO is discharged, you can start to rebuild your credit rating by making on-time payments on any remaining debts.
  • Legal protection: A DRO is a legally binding agreement between you and your creditors, providing you with legal protection against any further action.

Considerations Of A DRO

  • Limited Eligibility: DROs are only available to individuals with low income, limited assets, and less than £20,000 worth of unsecured debts. If you don’t meet these criteria, a DRO may not be the best debt solution for you.
  • Impact on Credit Rating: A DRO will have a negative impact on your credit rating and will remain on your credit file for six years. This can make it difficult for you to obtain credit in the future, as lenders may view you as a higher risk.
  • Restrictions on Financial Activity: During the 12-month DRO period, you will not be able to obtain credit over £500 without informing the lender of your DRO status. This may make it more challenging for you to manage your finances during this period.
  • Limited Debt Relief: Not all debts can be included in a DRO, such as secured debts like mortgages or hire purchase agreements. You will still be responsible for paying these debts during and after the DRO period.
  • Public Record: Your DRO will be listed on a public register, which means that it can be accessed by anyone who wants to view it. This could potentially impact your professional reputation.
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Debt Solution Advisor® is a trading style of J3 Debt Solutions Ltd. Visit J3 Debt Solutions – www.j3debt.co.uk.

J3 Debt Solutions (FRN933715) is an appointed representative of MoneyPlus Group Limited which is authorised and regulated by the Financial Conduct Authority. MoneyPlus Group Limited (07310059) registered office: Riverside, New Bailey Street, Manchester, M3 5FS

To find other sources of free advice visit MoneyHelper. It’s here to listen and give free, impartial, trusted guidance. Based around you and backed by the government.

J3 Debt Solutions Limited is registered in Scotland, registered company address: Suite 144, 1 West Regent Street, Glasgow, g2 1rw, SCOTLAND company registration number SC612868, Information Commissioner’s Office registration number ZA474414. J3 Debt Solutions Limited is a firm of Licensed Insolvency Practitioners. Jamie Carmichael is authorised to act as an Insolvency Practitioner in the UK by the Institute of Chartered Accountants of Scotland. Our Professional Indemnity Insurer is CNA Insurance Company Limited, 13th Floor, 20 Fenchurch Street, London, EC3M 3BY and our Professional Indemnity Insurance policy number is 10321330. The territorial coverage is worldwide. The solutions on this page are only applicable if you reside in Scotland. We will only provide advice after completing or receiving an initial fact find where the individual(s) concerned meets the criteria for one of our insolvency solutions, therefore, all advice is given in reasonable contemplation of an insolvency solution

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