What are Debt Relief Orders?
Under the Tribunals, Courts and Enforcement Act 2007, you can make application for a Debt Relief Order through the Insolvency Service if you have debts lower than £15,000, and you are on low income.
This type of Order is an alternative to going bankrupt (bankruptcy could be a more costly option), and it means that for 12 months, creditors named within the Order will not be able to take action against you for the debts.
After the initial 12 months you will be released from the debts, however; this will remain on your credit file for 6 years, and you may find that you are not able to obtain credit for 15 years thereafter (especially if you have a Debt Relief Restriction Order in place).
There is a strict eligibility criteria which needs to be adhered to if you are considering a Debt Relief Order:
*PLEASE NOTE: councils can still make deductions to benefits to recover over-payments during the Debt Relief Order period
What information will I need when I apply?
You will require certain documentation and compliance to apply for this type of Order:
What if my circumstances change?
Normally, a Debt Relief Order will last for a maximum of 12 months however, if within that time your circumstances change enough for you to make payment to your creditors, the Receiver can extend the 12 month period to an extra 3 (15 months in total), for you to enter into payment arrangements with your creditors. In the meantime, you will not be harassed by any creditor for the 15 month period.
What happens to joint debts?
The full amount of joint debts will be included in the Debt Relief Order, however only the party who is applying for the Order will be protected. The joint partner will still be liable for such debt.
What happens if I’m granted a Debt Relief Order?
I’m granted the Order, what restrictions does it place on me?
Debt Relief Restrictions Order
If during the initial application process the Receiver believes that you have either been dishonest during the application, or you are to blame for your debt; they may apply to the Court for a Debt Relief Restrictions Order, lasting between 2 to 15 years.
The restrictions for this type of Order is the same as for the Debt Relief Order, but can last for up to 15 years on your credit file, (not the initial 6 years). This means that credit restrictions will remain in place for up to 15 years.
How much is a Debt Relief Order, and how do I apply?
A Debt Relief Order costs £90, which is non-refundable, whether the Receiver accepts or rejects your application. The £90 needs to be submitted in cash. You can apply for the Order online, via an approved intermediary (addresses below).
After submitting the application online, you must also print a copy, sign and send it to:
The Debt Relief Order Unit
The Insolvency Service
1st Floor, Cobourg House
Who should I attend directly, for submission of my application?
115 -123 Pentonville Road
Telephone: 0207 833 2181
Contact: Lisa Colclough
Consumer Credit Counselling Service
Telephone: 0800 138 1111 (Mon – Fri 8am – 8pm)
Contact: Martin Swift
Baines & Ernst Ltd
Baines and Ernst Ltd
18 -22 Lloyd Street
Telephone – 0845 307 5888
Contact – Lyndsey O’Neil (Insolvency Support Manager)
Email – email@example.com
The Institute of Money Advisers
4 Park Court
Park Cross Street
Telephone: 0113 242 0048
Contact: Katherine Hougham
51-53 Hagley Road,
Telephone: 0121 410 6247
Contact: Michelle Edwards (Contact Centre Manager)
Totemic Ltd trading as Payplan
Telephone: 0800 716 239 (Mon – Fri 8am – 9pm / Sat 9am – 3pm)
Contact: Juliana Mclean
Insolvency Practitioners Association
4-10 Heneage Lane
Telephone: 020 7623 5108
Contact: Andrew Kerr
63 St Mary Axe
Telephone: 020 7469 5700
Contact: David Hawkes
30 Poole Hill
Telephone: 0300 330 0516
Contact: Shelter Helpline
Christians Against Poverty
Telephone: 0800 3280006
Contact: New Client Enquiries
South Langworthy Road
Telephone: 0800 027 5930
Contact: Melanie Taylor