Debt Relief Order Application: How It Works (2026)

What Is a Debt Relief Order Application?

A debt relief order application is a formal legal process that allows people in England and Wales with low income, few assets, and debts they cannot repay to have those debts written off after a 12-month period. According to GOV.UK, a Debt Relief Order (DRO) is one of the formal insolvency options available in England and Wales and is administered by the Insolvency Service.

The application is not made directly to the Insolvency Service. Instead, it must be submitted through an approved intermediary — a specialist adviser authorised to prepare and submit DRO applications on a person's behalf. This intermediary role is critical: without going through an approved intermediary, an application cannot be processed.

Since 6 April 2024, there is no application fee. The previous £90 fee was abolished, making the DRO the only formal insolvency route in England and Wales that costs nothing to enter. For people on very low incomes, this change significantly widened access to debt relief.

Who Qualifies for a DRO?

The eligibility criteria for a DRO are set out in the Insolvency Act 1986 (as amended). According to GOV.UK, all of the following conditions must be met at the time of application:

• Total qualifying debts must be £50,000 or less (this limit was raised from £30,000 on 28 June 2024)
• Surplus income — money left over after essential household expenses — must be £75 or less per month
• Total assets must be worth £2,000 or less (with a separate motor vehicle allowance of up to £4,000 if a vehicle is needed for work or due to a disability)
• The applicant must be domiciled in England or Wales, or have lived or carried on business there within the last three years
• At least six weeks must have passed since any previous DRO ended, and the applicant must not be subject to another insolvency process

Not all debts qualify. Excluded debts — those that a DRO does not write off — include student loans, child maintenance arrears, court fines, social fund loans, and certain benefit overpayments. Secured debts, such as a mortgage, are also excluded. However, common unsecured debts such as credit cards, personal loans, council tax arrears, benefit overpayments (in some cases), and utility bill arrears typically do qualify.

How the Debt Relief Order Application Process Works

Step 1: Find an Approved Intermediary

The first practical step is locating an approved intermediary. These are individuals authorised by a competent authority — such as a debt advice charity — to submit DRO applications to the Insolvency Service. Many free debt advice services, including those signposted below, can connect someone with an approved intermediary at no charge.

The intermediary will carry out a detailed review of the applicant's financial situation. This includes income, expenditure, assets, and a full list of debts including creditor names and balances. Accuracy at this stage is essential: providing false or incomplete information in a DRO application is a criminal offence.

Step 2: Preparing the Application

Once the intermediary has gathered all relevant information, they prepare the formal application using the Insolvency Service's online system. The applicant must provide evidence to support the figures, which may include recent bank statements, payslips or benefit award letters, and details of any assets such as a vehicle or savings.

The intermediary checks that all eligibility criteria are met before submitting the application. If any criterion is not met — for example, if surplus income exceeds £75 per month — the intermediary will flag this and may suggest alternative routes, such as a Debt Management Plan or bankruptcy.

Step 3: Submission to the Insolvency Service

The approved intermediary submits the application electronically to the Insolvency Service. According to GOV.UK, the Insolvency Service will then check the application and, if approved, make a DRO. The applicant and all listed creditors are notified. The DRO is also recorded on the Individual Insolvency Register, which is a public record.

If the application is refused, the Insolvency Service will explain the reason. Common reasons for refusal include missing information, ineligible debts being listed, or criteria not being met. An approved intermediary can help address these issues before reapplying.

Step 4: The 12-Month Moratorium Period

Once a DRO is in place, a 12-month moratorium begins. During this period, creditors listed in the DRO cannot take action to recover the debts — including pursuing court action, contacting the applicant for payment, or instructing bailiffs in relation to those debts. Interest and charges on qualifying debts are also frozen.

During the 12 months, the person subject to the DRO must not obtain credit of £500 or more without disclosing the DRO to the lender, must not act as a company director, and must notify the Insolvency Service of any material change in circumstances — such as receiving an inheritance or a significant pay rise. Failing to do so can lead to a DRO being revoked.

What Happens at the End of a DRO?

If the DRO runs its full 12-month course without being revoked, all qualifying debts included in the order are written off. The person is no longer legally obliged to repay those amounts. The DRO entry remains on the Individual Insolvency Register for a period after the order ends, and the DRO will appear on the applicant's credit file, typically for six years from the date the DRO was made.

It is worth noting that a DRO does not affect debts that were excluded from it — such as student loans or court fines. Those remain payable in full. Any asset that was undisclosed at the time of the application may also lead to the Insolvency Service revoking the DRO and, in serious cases, pursuing a Debt Relief Restrictions Order (DRRO), which can extend restrictions for up to 15 years.

DRO vs Other Formal Debt Solutions

A DRO is one of several formal insolvency routes available in England and Wales. For comparison:

• Bankruptcy costs £680 to apply for and is generally suited to those with higher debts or assets. It lasts 12 months but has wider-reaching consequences for assets including property.
• Individual Voluntary Arrangement (IVA) involves a formal agreement with creditors to repay part of what is owed over a set period, typically five or six years. It is arranged through an insolvency practitioner.
• Debt Management Plan (DMP) is an informal arrangement to repay debts in full over time at a reduced monthly rate. It does not write off debt but also does not carry the formal insolvency status of a DRO.

A DRO is specifically designed for people who genuinely cannot afford any of the alternatives — those with very low income, minimal assets, and debts that are manageable in scale but impossible to repay in practice. The right route for any individual depends on their full financial picture, and that assessment is best carried out by a regulated debt adviser.

How a DRO Affects Day-to-Day Life

During the 12-month moratorium, certain restrictions apply automatically. The person subject to the DRO cannot act as a company director or be involved in the formation, promotion, or management of a company without court permission. They cannot obtain credit of £500 or more without informing the lender of the DRO, and they must not trade under a name different from the one under which the DRO was made without disclosing the DRO.

These restrictions are similar to — but less extensive than — those that apply during bankruptcy. For most people applying for a DRO, who are typically renting their home and have no business interests, the practical day-to-day impact is limited. The main effect is the freeze on creditor action, which can bring significant relief to someone who has been receiving letters, calls, or threatened with enforcement.

A DRO is recorded on the credit file and will affect the ability to obtain credit, mortgages, or certain financial products for the period it appears. Anyone considering a DRO should be aware of this impact before applying.

Common Questions About the DRO Application

Can someone apply for a DRO directly without an intermediary?

No. According to GOV.UK, a DRO application must be made through an approved intermediary. It is not possible to apply directly to the Insolvency Service without one. Free debt advice services can help identify an approved intermediary at no cost to the applicant.

How long does a DRO application take to be approved?

Once an approved intermediary submits the completed application to the Insolvency Service, a decision is typically made within a few days, though timescales can vary. Delays often occur at the preparation stage — gathering accurate information about all debts and assets takes time, and the intermediary must be satisfied that all criteria are met before submitting.

What happens if circumstances change during the 12 months?

If there is a material improvement in financial circumstances — such as a significant increase in income or receiving an inheritance — this must be reported to the Insolvency Service. The DRO may be revoked if the person no longer meets the eligibility criteria, meaning the debts are no longer written off and creditors can resume recovery action. The Insolvency Service has powers to investigate and act on changes that were not disclosed.

Does a DRO appear on a public register?

Yes. A DRO is recorded on the Individual Insolvency Register, which is publicly searchable on GOV.UK. It also appears on the applicant's credit file. Both records reflect the DRO for a period after the order is made — typically six years for the credit file entry from the date the DRO was granted.