A debt relief order is like a mini bankruptcy.
It is a way for individuals to deal with debts they cannot pay and allows them to make a fresh start free from debt.
A debt relief order has the same restrictions and terms as bankruptcy but is available where the following applies:
- you owe £30,000 or less
- you have less than £75 to spend each month, after paying tax, national insurance and normal household expenses
- you lived or worked in England or Wales in the last 3 years
- your assets aren’t worth more than £2,000 in total
- you’ve not had a debt relief order in the last 6 years
A debt relief order ends after 12 months, restrictions are lifted and the individual is released from their debts at this time.
The restrictions in place include, but are not limited to, being unable to obtain credit of more than £500 without disclosing they are subject to a debt relief order and being unable to be a director of a limited company.
Anyone subject to a debt relief order is still allowed to operate a bank account, run a business (but not a limited company), own a car (subject to financial limits and if required for work purposes) and earn a living.
Contact us if you would like further information and assistance regarding debt relief orders. There is no charge for doing so and it is without obligation.