Debt Relief Order Amount

Published October 10, 2023

Debt relief orders (DROs) are a form of debt solution available in the UK for individuals who are struggling with unmanageable debts. Unlike bankruptcy, DROs offer a more cost-effective and less intrusive way for individuals to repay their debts. If you are considering applying for a DRO, it is important to understand how the process works and how you can maximize the amount of debt relief you can receive. In this post, we will discuss some tips and strategies for maximizing your DRO amount. What is a Debt Relief Order? A DRO is a formal legal agreement between you and your creditors arranged by the Insolvency Service. It allows you to repay your debts over a period of 12 months, after which your remaining debts will be written off. To qualify for a DRO, you must have little to no assets, a low income, and less than �50 disposable income per month. Tips for Maximizing Your DRO Amount: 1. Seek Professional Advice Before applying for a DRO, it is essential to seek professional financial advice from a debt advisor or a DRO intermediary. They can help you assess your financial situation, determine your eligibility for a DRO, and find the best solution for your specific circumstances. They can also guide you through the DRO application process and ensure that all the necessary information and documents are included, increasing the chances of a successful DRO application. 2. Include All Your Debts When applying for a DRO, it is vital to include all your debts, including small debts that may seem insignificant. This includes credit card debts, personal loans, overdrafts, utility bills, council tax arrears, and even rent arrears. By including all your debts, you can have a more accurate picture of your overall debt situation, and it can increase your chances of a successful DRO application. 3. Calculate Your Disposable Income Accurately As mentioned earlier, to qualify for a DRO, you must have less than �50 disposable income per month. It is crucial to calculate your disposable income accurately and include all your necessary expenses, such as rent, food, utilities, and transport costs. By accurately assessing your disposable income, you can determine if you meet the eligibility criteria for a DRO and how much you can afford to repay each month. 4. Consider Negotiating with Your Creditors Another way to maximize your DRO amount is to negotiate with your creditors. You can approach them and explain your financial situation, the DRO process, and how it can benefit them. By showing them that you are taking steps to repay your debts and the alternative is bankruptcy, they may be willing to accept a lower repayment amount, reducing your overall debt burden. 5. Review Your Credit Report Before applying for a DRO, it is crucial to review your credit report and ensure it is accurate. Any errors or discrepancies on your credit report can affect your DRO application, and you may end up paying more than you should. If you find any errors, you can dispute them with the credit reporting agency and have them corrected before submitting your DRO application. Strategies for Maximizing Your DRO Amount: 1. Increase Your Income Increasing your income is one of the most effective ways to maximize your DRO amount. You can take on a part-time job, sell unwanted items, or even rent out a spare room to generate extra income. By adding this income to your disposable income, you may be eligible for a higher DRO amount, allowing you to repay more of your debts and potentially reducing the number of debts written off at the end of the DRO period. 2. Reduce Your Expenses In addition to increasing your income, you can also look for ways to reduce your expenses and free up more money to put towards your DRO. This can include cutting back on non-essential items, switching to more affordable alternatives, and finding ways to save on utilities. By reducing your expenses, you can increase your disposable income and potentially qualify for a higher DRO amount. 3. Explore Other Debt Relief Options While a DRO may be the best solution for some individuals, others may benefit from exploring alternative debt relief options. This can include debt management plans, individual voluntary arrangements (IVAs), or debt consolidation loans. By considering all your options, you may be able to find a more suitable solution that can maximize your debt relief. In conclusion, a DRO can provide significant debt relief for individuals struggling with unmanageable debts. By following these tips and strategies, you can increase your chances of a successful DRO application and maximize the amount of debt relief you can receive. However, it is essential to remember that a DRO should not be taken lightly and should only be considered after seeking professional advice and exploring all other options.

Don’t Wait! Get Your Quote Today.

$15,000

$1,000

$100,000+

Get a Quote Today!