United Kingdom Offers Debt Relief Orders For The Insolvent

: Chris Lee Law Firm

  Filed under: Debt

debt relief orderResidents of the United Kingdom have been granted the opportunity to avoid personal bankruptcy while obtaining a similar level of debt relief for the last two years. As an initiative to help the financially insolvent, the government began a program to offer Debt Relief Orders (DRO). These orders essentially provide the same benefits of bankruptcy with fewer risks.

Benefits

Obtaining a DRO is a much more efficient way of relieving debts for many people. Since the process does not require the intervention or assistance of a legal court, debtors can apply easily online for the order. Similar to bankruptcy, once a DRO is issued creditors must cease collection efforts until the order has expired. This allows the debtor time to regain control over their finances or obtain a higher level of income sufficient for repaying their debts. DROs are much cheaper than filing for a bankruptcy and cost the equivalent of about $130 USD. Perhaps the most sought after benefit of a DRO is the legal protection over all assets once the order is issued. In other words, creditors will have no claim over the debtor’s assets for seizure or liquidation.

Considerations

The drawbacks with a DRO are similar to those found in a traditional bankruptcy. Debtors must meet strict requirements in order to qualify. There is also a six year waiting period between DRO filings, meaning that a debtor cannot obtain a DRO within six years of their last DRO filing. The debtor also may experience credit damage as a result of delinquent account standings until their debts are resolved.

Another major consideration is becoming the popularity of DROs. The government has become concerned about the increasing number of people obtaining DROs since the program began in 2009. More specifically, young adults between the ages of 24 and 35 are the largest group of DRO filers in the United Kingdom. The findings are being reviewed carefully to ensure the DRO program is not facilitating credit abuse and unwise debt accumulation habits.


Are you a candidate for bankruptcy?
Would you like to find out if bankruptcy is the right option for you? Try our Free Online Bankruptcy Evaluation. 4 easy steps to see if bankruptcy could be the right option for you!
  • Step 1
  • Step 2
  • Step 3
  • Step 4
Please Select Each Box That Applies To You
Creditor Harassment
Loss of Income
Foreclosure
Disability or Illness
Current Expenses
Auto Loans
Credit Cards
Medical Bills
Payday Loans
Do you have any additional information you would like to share?
Contact Information