Debt Relief Order After 6 Years

Published October 10, 2023

Introduction

Financial freedom is something that many people dream of, but for those struggling with debt, it may seem like an impossible goal. However, with the help of a debt relief order (DRO), financial freedom can become a reality in just 6 years. A DRO is a form of debt relief available in the UK that allows individuals with low income and minimal assets to write off their debts and start fresh. In this blog post, we will discuss the benefits of a debt relief order after 6 years and how it can help you achieve financial freedom.

What is a Debt Relief Order?

A Debt Relief Order is a form of insolvency in the UK that was introduced in 2009 as a simpler and cheaper alternative to bankruptcy. It is meant for individuals who have a low income, minimal assets, and owe less than �20,000 in debt. A DRO is a legally binding agreement between you and your creditors, which means that once it is approved, you will no longer have to make any payments towards your debts for a period of 6 years. After this period, your debts will be written off, and you will be able to start fresh.

The Benefits of a Debt Relief Order after 6 Years

1. Relief from debt and financial stress

The most obvious benefit of a debt relief order after 6 years is that it provides relief from your debts and the stress that comes with it. With a DRO, you will no longer have to worry about making multiple debt payments every month, which can be overwhelming and exhausting. Instead, you will have a single monthly payment towards your living expenses, and the rest of your income will be free to save or use as you please.

2. Improved credit score

While a Debt Relief Order will have a negative impact on your credit score in the short term, after 6 years, your debts will be written off, and your credit score will start to improve. This is because your DRO will be removed from your credit report, and any remaining debts will be marked as settled. As long as you continue to manage your finances responsibly, your credit score can continue to improve over time.

3. No more legal action from creditors

With a DRO, your creditors are not allowed to take any legal action against you for the duration of the order. This means no more letters, phone calls, or legal threats from debt collectors. This can provide a great sense of relief and peace of mind, knowing that you are protected from such actions.

4. No more interest, fees, or charges

One of the biggest benefits of a DRO after 6 years is that all interest, fees, and charges on your debts will be frozen for the duration of the order. This means that you will not have to worry about your debts increasing due to these additional charges. This can save you a significant amount of money in the long run and make it easier for you to pay off your debts once the DRO is complete.

5. No more debt payments

One of the main reasons people choose a DRO over other forms of debt relief is that it allows them to write off their debts and start fresh. After 6 years, your debts will be officially written off, and you will have no further obligations towards them. This means that you can use your income for other expenses or save it for the future, without the burden of debt hanging over you.

How to Apply for a Debt Relief Order

Applying for a Debt Relief Order is a relatively simple process, but it is important to seek guidance from a debt advisor before proceeding. Here are the basic steps to apply for a DRO: 1. Determine if you are eligible - You must meet certain criteria to be eligible for a DRO, such as owing no more than �20,000 in debt, having minimal assets, and having a low income. 2. Seek advice from a debt advisor - A debt advisor can help you assess your financial situation and determine if a DRO is the right option for you. They can also help you with the application process. 3. Complete the application - You can complete the application online or through a debt advisor. You will need to provide details about your debts, income, and expenses. 4. Pay the fee - There is a fee of �90 to apply for a DRO, but if you are on certain benefits, you may be able to get this fee waived. 5. Wait for approval - Once your application is submitted, it will be processed by the Insolvency Service. If approved, your DRO will come into effect after 6 weeks.

In Conclusion

A Debt Relief Order can be a game-changer for those struggling with debt. It provides a way to write off your debts and start fresh after 6 years, without having to go through the more severe and restrictive process of bankruptcy. If you are eligible, a DRO can provide many benefits, including relief from debt and financial stress, improved credit score, protection from legal action, and more. Just remember to carefully consider your options and seek advice from a debt advisor before applying for a DRO. With the help of a DRO, you can take the first step towards achieving financial freedom and a brighter future.

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