What Sort of Debt Problems Can A Debt Relief Order Solve?
Contrary to popular belief, a Debt Relief Order doesn't wipe all debts clean. Having said that, the majority of debts are covered - and in comparison to other debt management solutions - it is fairly comprehensive.
Unsecured Debts
Firstly, all debts must be unsecured and should total no more than £15,000 in order for them to qualify. If you have accrued debt thanks to overspending on your credit card, store card or bank overdraft then you're in luck as this is covered by a DRO.
Utility Bills Etc
Similarly, if you have missed utility payments such as telephone, water and gas then you're also covered. A Debt Relief Order will even protect you against rent arrears and council tax bills. If you're self-employed then you may have outstanding tax and national insurance contributions to pay, if this is the case then you're in luck, as a DRO will protect you against this type of debt.
Other qualifying debts include buy-now-pay later agreements and personal loans. It's worth noting that if you have a hire purchase agreement then you will have to return the goods bought with the loan, unless you can find someone else to pay the instalments.
What's Not Covered
Unfortunately, not all debts are covered by a Debt Relief Order. If you have student loans, court fines or pay child support and maintenance then you must continue to pay these separately. A DRO will not protect you against these creditors, allowing them to take action against you if you continue to miss payments. Your student loan may, however, be frozen depending on your circumstances and your annual salary.
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