How long does a DRO stay on your credit record?

A Debt Relief Order remains on your credit file for six years from the date it is officially granted. During this timeframe, your credit score will be reduced, making it difficult to secure new credit. After six years, the entry drops off automatically.

Does a DRO affect your job or tenancy?

Most occupations are completely unaffected by a DRO, though certain financial, legal, or licensed roles may enforce restrictions. Landlords rarely evict tenants solely due to a DRO if rent payments remain up to date, but you should review your tenancy agreement terms.

What happens during the 12-month DRO period?

During the 12-month moratorium, creditors cannot demand repayments or contact you. However, if your financial circumstances improve significantly—such as receiving a cash windfall or a salary increase that pushes surplus income over £75 per month—you must report this immediately to the Insolvency Service.

Are council tax and energy debts covered by a DRO?

Yes, both council tax arrears and utility bill debts are classified as qualifying debts under official Insolvency Service guidelines. Including them halts recovery action by your local council or energy supplier and writes off the balances after 12 months.

What Is a DRO? Debt Relief Order Rules & Eligibility 2026

Last reviewed 6 August 2026. Rates and thresholds change — always confirm current figures on GOV.UK.

What Is a Debt Relief Order (DRO) and How Does It Work?

A Debt Relief Order (DRO) is an official insolvency process administered by the Insolvency Service on behalf of GOV.UK. It is specifically tailored for low-income UK residents who cannot afford to pay off their non-priority debts.

Once granted by an Official Receiver, a DRO places a 12-month moratorium on your eligible debts. During this year, creditors cannot demand payments, add interest, or take court action against you. If your financial situation does not improve after 12 months, the full amount of covered debt is permanently written off.

To access this support, you must apply through an authorised intermediary. Seeking tailored expert debt advice is the mandatory first step to determine if a DRO is the right option for your circumstances.

Key Eligibility Criteria for a DRO in 2026/27

The UK government maintains strict thresholds to ensure DROs remain targeted at households in genuine financial distress. These thresholds reflect figures established in recent legislation and maintained for the 2026/27 financial year.

Eligibility Requirement	Official 2026/27 Limit	Key Details
Maximum Qualifying Debt	£50,000	Total unsecured debt must not exceed this figure.
Maximum Disposable Income	£75 / month	Surplus left over after essential housing and living costs.
Maximum General Assets	£2,000	Total value of savings and property (excluding essential goods).
Maximum Vehicle Value	£4,000	Single vehicle value limit (exempt if adapted for disability).
Application Fee	£0	The historic £90 fee remains permanently abolished.

You must also have lived or worked in England, Wales, or Northern Ireland within the last three years. Furthermore, you cannot have had another DRO in the past six years or be subject to an ongoing bankruptcy proceeding.

Which Debts Can and Cannot Be Included?

Not all financial liabilities can be written off through a DRO. Understanding the distinction between qualifying and excluded debts is vital before submitting your application.

Qualifying debts include unsecured personal loans, credit cards, store cards, overdrafts, catalogue debts, and buy-now-pay-later balances. Crucially, arrears on essential bills like council tax arrears and unpaid utility bills can also be written off.

Excluded Debts

Certain liabilities are legally protected and cannot be cancelled under insolvency rules. Excluded debts include court-ordered criminal fines, child maintenance arrears, student loans, and TV Licence debts.

Warning on Deprivation of Capital: Giving away assets, selling items below market value, or favoring specific creditors before applying for a DRO violates Insolvency Service regulations. Doing so can lead to a Debt Relief Restrictions Order (DRRO) lasting up to 15 years.

DRO vs Bankruptcy: Which Solution Fits Your Needs?

While both DROs and bankruptcy result in debt discharge, they cater to distinct financial profiles. A DRO is designed as a streamlined, low-cost alternative for individuals without property or high earnings.

Bankruptcy carries higher administrative hurdles and is generally suited to individuals with significant assets or debts exceeding the £50,000 limit. A DRO costs £0 to submit, whereas a formal bankruptcy application incurs a £680 upfront fee in GOV.UK schedules.

Before deciding on any formal route, complete a comprehensive budget calculation using a free budget planner to accurately account for your monthly income, expenditure, and actual surplus cash.

How to Apply for a DRO Step-by-Step

You cannot apply for a DRO independently; the application must be completed through a licensed, government-approved intermediary. Free advice organisations like Citizens Advice, StepChange, and National Debtline act as intermediaries.

First, gather proof of your income, expenditures, benefits, bank statements, and debt paperwork. Your adviser will verify your figures, submit the digital form to the Insolvency Service, and guide you through the processing period.

Once approved, the Official Receiver registers your order on the public Individual Insolvency Register. Your creditors are formally notified, bringing an immediate halt to all enforcement letters and collection calls.