How can I apply for a debt relief order?


Debt relief orders were created by the Tribunals Courts and Enforcement Act 2007 and came into force in England and Wales on 6th April 2009. The main purpose of debt relief orders is to provide a simple, quick and cheaper alternative to the formal bankruptcy procedures, for individuals on low incomes with few assets. It is possible to obtain a debt relief order for under £100 and in contrast to a bankruptcy petition, you do not have to go to court to apply for one. 
Like bankruptcy, debt relief orders are suitable for individuals who are unable to keep up their debt repayments. Unlike bankruptcy however, a debt relief order can only be applied for if you have total unsecured liabilities of £15,000 or less. Your gross assets must not exceed £300, so if you own or part own your home, then a debt relief order will not be for you. Although a car is considered an asset, you are likely to be allowed to keep this if it is worth less than £1000 or if it has been adapted for a physical impairment you have. You can only apply for a debt relief order if your total disposable income, calculated as total income less normal household expenditure, is less than £50 per month. 
Additional restrictions for debt restriction orders state that you must have lived in England or Wales for the past three years, and must not have been the subject of a debt restriction order within six years of the current application. You cannot also be involved in another formal insolvency procedure at the time of your application, for example if you are already an undischarged bankrupt, or the subject of an Individual Voluntary Arrangement. 
The main purpose of a debt relief order is that creditors you owe money to cannot take any action against you for the 12 months that the debt relief order is in place. To apply for a debt relief order you should contact your solicitor, who can offer legal advice as to whether you qualify and how to go about completing the application.
If you would like to obtain legal advice on debt relief orders, Caven can put you in touch with a local specialist solicitor free of charge. So, if you have any questions or would like our help in finding local solicitors please call us on 08001 221 2299 or complete the web-form above.
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