A step change debt relief order uk is often known as DRO, it is a one kind of way to clear all your debts. This is generally suitable for people with a comparatively low level of debt, & comparatively few properties as well as assets. (i.e. valuable belongings of value like a house or car). If a stepchange debt relief order is the right choice for you, this might be a simpler as well as a cheaper option to bankruptcy.
And , if you are successful in the application, a stepchange debt relief order means you won’t need to pay back certain debts. But, at the end of the stepchange debt relief order period (generally 1 year), any debts involved within the stepchange debt relief order will be discharged so you won’t need to repay them at all.
In order to be eligible you should meet all the below mentioned criteria:
- The debts are not more than 20,000 pounds
- stepchange debt relief order in the last six years
- worked or stayed in UK for last 3 years
- you aren’t a homeowner
- you have restricted spare money ( not more than 50 pounds to spend every month, after national insurance, tax, & all the household expenses)
- your properties are worth no more than 1000 pounds total!
So, if you are currently in the middle of bankruptcy, an Individual Voluntary Arrangement, or any other formal insolvency-oriented procedure, you won’t be able to opt for the stepchange debt relief order . However, if one of your creditors has put in a court request for making you bankrupt, then you can ask for the permission in order to apply for a stepchange debt relief order instead.
How to apply for a DRO?
In order to apply for a stepchange debt relief order , you will be required to find a reliable as well as licensed debt adviser, also known as an ‘approved intermediary’ – you cannot apply on your own. It costs a minimum amount to apply for a DRO; however, there are some debt charities that might help you to pay this.
Your hired debt adviser can help you finish the stepchange debt relief order application form & define the process for you. Then they’ll check each and every detail of your personal situation to assure you meet all the qualifying criteria. And when they have validated the application, the stepchange debt relief order can be easily applied for within a few hours.
How long does a stepchange debt relief order take to process?
When a stepchange debt relief order application is settled, this will take one year to process. And during this period, you will be in the ‘moratorium’ period – it means you will need to stick to some limitations, however it also means that creditors involved under the stepchange debt relief order should not chase you during this time.
What can be included in a step change debt relief order in the UK?
Well, ‘Qualifying debts’ which can go into a DRO involve:
- overdrafts, credit cards,& loans
- benefits overpayments
- purchase now pay later process
- business debts
- Utility bills, arrears on rent, telephone bills, income tax, & council tax.
That’s all about How to Apply for a debt relief order in the UK. Thanks for reading our blog. To know more,, reach us at your convenience!!!
Benefits of a DRO
• A debt relief order can be a less expensive option than bankruptcy.
• You don’t make any payments toward your debts for a year. They’ll be written off after that.
• During the 12-month term, your creditors are unable to pursue you for your debts.
• Despite the fact that a DRO is a formal debt solution, you are not required to appear in court.
Risks of a DRO
- If you owe less than £30,000 (£20,000 in Northern Ireland) and live in England, Wales, or Northern Ireland, you can apply for a DRO.
- You’ll have to pay a £90 non-refundable cost to the Insolvency Service. If you qualify, our expert team can assist you in submitting an application.
- If you own a home, you are not eligible to apply.
- A DRO will be recorded in a public database and will have a negative impact on your credit report.
How to apply for a DRO
- Find out if you qualify for a DRO and if it’s the best solution for you. Call us to speak with one of our expert advisors or use our free online guidance tool.
- If a DRO is the best answer for your debt situation, we’ll send you the relevant paperwork and assist you with the application process. You’ll need to fill out these forms and send them to our DRO specialists.
- After that, our DRO team will put together your application. Before they submit this, they must pay a £90 fee to the Insolvency Service in full or in installments’ if they live in England or Wales.
We can submit your application once the cost has been paid.
You can’t apply for a Debt Relief Order if:
- Your creditors have filed a petition to declare you bankrupt, but there has yet to be a hearing (unless your creditors agree that you can still apply).
- a Bankruptcy Restrictions Order or Undertaking has been issued to you.
- You’ve filed for bankruptcy but the judge has referred you for a debt relief order instead — this does not apply if you’ve filed for bankruptcy but the judge has referred you for a debt relief order instead.
- You’ve declared bankruptcy.
- You have or are applying for an Individual Voluntary Arrangement.
- you’ve had a Debt Relief Order in the last six years (see next part).
- a Debt Relief Restriction Order or Undertaking has been issued to you.