What is a debt relief order?

A debt relief order became available form of resolving debt issues from 6th April 2009. It’s primary benefit is as an insolvency procedure aimed at people with few assets who become unable to pay their debts and the bankruptcy procedure.

The cost of a debt relief order is £90. This fee must be paid in full before the application for an order is considered . However it can be paid in instalments over a six-month period. Payment can be made in cash through Payzone and at the Post Office. Charitable cheques will also be accepted. If the application is rejected the £90 fee will not be refunded even if for example the applicant does not meet the order criteria.

Debt relief orders must be made through an 'approved intermediary'. This is a specialist debt adviser who has been authorised to make applications on behalf of clients.

Who can apply?

A debt relief order will only be available if the applicant:
is unable to pay their debts
has debts of less than £15,000
has available income after household expenses of £50 a month or less
has assets less than £300 (vehicles worth under £1,000 are ignored)
lives in England or Wales, or has been resident or carrying on business in England or Wales in the last three years
is not subject to any other formal insolvency procedure at the time of the application
has not had a debt relief order within the previous six years.
A debt relief order can be revoked if the applicant’s circumstances change sufficiently to enable them to make contributions towards their debts.

Contact Debtmuncher for further information.