Including the overdraft
Overdraft debt is unsecured and treated like any other unsecured debt for DRO purposes.
When the DRO is granted, the bank cannot pursue the overdraft during the 12-month moratorium. It is written off on discharge.
The bank will normally close the current account with the overdraft on the DRO grant.
Setting up alternative banking first
Most Authorised Intermediaries advise opening a basic bank account with a different bank before the DRO is submitted. This protects your day-to-day banking.
Basic bank accounts cannot be refused solely on credit history and are available from most major banks. They have no overdraft facility.
What if you have wages going into the overdraft account?
Set up your wages to go into a new account before the DRO. The old account is likely to be closed and any wages arriving after closure could be redirected.
This is one of the practical steps AIs help with during DRO preparation.