From the 6th April 2009 debtors on low incomes with few assets can apply online to the Insolvency Service for a Debt Relief Order.

To qualify for a DRO:

• The debtor must be unable to pay his/her debts;
• The debtor's total unsecured liabilities must not exceed £15,000;
• The debtor's total gross assets must not exceed £300;
• The debtor's disposable income, following deduction of normal household expenses, must not exceed £50 per month.
• The debtor must be domiciled in England or Wales, or in the last 3 years have been resident or carrying on business in England or Wales.
• The debtor must not have previously been subject to a DRO within the last 6 years.
• The debtor must not be involved in another formal insolvency procedure at the time of application for a DRO.
  

An Application for a DRO costs the debtor only £90.00, which can be paid in installments.

If a DRO is made the debtor is:

• Protected from enforcement action by the creditors included in the application (bar certain creditors whose debts cannot be scheduled in the DRO and those creditors whose debts are included in the DRO but who have successfully obtained leave from the court to pursue their debts).
• Free from those debts at the end of the period of the Order which will usually be for 12 months.
  

If a creditor thinks that the debtor does not meet the criteria they should provide the information they have to the official receiver who will consider the objection and if appropriate revoke the DRO.

For more information please contact our Commercial Recovery Manager Vicki Moffat on 01228 888 964 and have a look at the Governments Insolvency website.