Thursday 22nd June 2017
As part of the Citizens Advice Exeter and The Express and Echo advice column this week we focus on Debt Relief Orders.
I’m struggling with around £18,000 worth of debt and I wondered whether I’d be eligible for a Debt Relief Order. I know the limit used to be £15,000 but I heard that it had increased last year. Is that right?
A Debt Relief Order (DRO) can be a way to help people out of unmanageable debt. The debt limit for a DRO is now £20,000 so you might be eligible. Last year we saw an increase of 11% in enquiries about DROs and bankruptcy.
You could qualify for a DRO if you don’t own your home, have assets worth no more than £1,000, a motor vehicle worth no more than £1000 and have less than £50 left each month once you’ve paid your essential costs.
Debts such as magistrate’s court fines, student loans and child support maintenance aren’t covered by a DRO but credit card debt, overdrafts, loans and rent arrears are so check first whether you’re eligible.
The DRO lasts a year and during that time you don’t have to make any payments towards most debts included in your DRO. Your creditors can’t force you to pay off the debts either.
At the end of the DRO period your debts will be written off but you’ll still be responsible for paying off any debts that weren’t included in the DRO.
It’s also important to consider that while a DRO can help you deal with your debt, it may affect your credit rating and if during the 12 month period you borrow more than £500 you have to tell the creditor about your DRO.
For more help and advice go to citizensadvice.org.uk or telephone Citizens Advice Exeter on 03444 111 444.
Look out for our column next week when we focus on pay and entitlements at work.
The information contained in these articles does not constitute advice. Citizens Advice Exeter and The Express and Echo accept no liability for the information published. Citizens Advice Exeter is unable to respond to individual requests for advice through these columns. Copyright Citizens Advice. For the most up-to-date information, please visit www.citizensadvice.org.uk