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. Is that right?
A Debt Relief Order can be a way to help people out of unmanageable debt.
From October 1 this year, the debt limit for a DRO was increased to £20,000 so you might now be eligible.
You could qualify for a DRO if you don’t have your own home, have up to £1,000 worth of assets, a car worth no more than £1,000 and have £50 or less left each month once you’ve paid your essentials.
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.
Remember that Citizens Advice is here to help you in Heanor so if you are in any doubt on what to do next please come in and see us at Heanor Town Hall or give us a call on 0844 375 2712.
Find out more about a DRO at www.adviceguide.org.uk