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Debt Relief Order Restrictions: The Rules of a DRO

14 May 2019 - Posted by TalkAboutDebt

There are some rules and restrictions if you have a DRO, such as being unable to promote, manage or set up a limited company without seeking permission from the court.


Will a DRO affect my claim to any benefits?


A Debt Relief Order (DRO) is a legal process for dealing with unsecured debts and is not something that has an impact on your ability to claim any benefits that you are entitled to.


Can I save money while on a DRO?


Reasonable savings are not likely to do anything to jeopardise your DRO, particularly if they are built up from the income you had when you went into your DRO.

If your circumstances change, however, during your DRO, then you need to inform the Official Receiver of this, such as acquiring new sources of income.


Can I go on holiday when I have a DRO?


Although you will have no international travel restrictions placed on you as part of your DRO, you may be expected to declare that you have been made insolvent in future contracts if you choose to move overseas. You would also be expected to declare your new income, expenditure and new address to the DRO unit.


How do my Direct Debits work under a DRO?


A Debt Relief Order will only remove your liability for the debts listed on the Debt Relief Order application form at the time you applied. You however will remain liable to cover the current ongoing costs associated with day-to-day living such as your gas, electric, phone contract, broadband and car insurance.


Can I get a council house while on a DRO?


All councils have a requirement to provide information on how to apply, who is eligible, how applicant priority is assessed and the procedures they will follow when looking at an application. So you can ask the council, or check their website for full details of their application process. You can find a lot of useful information about council housing on Shelters website.


Does a DRO affect home insurance?


Entering into a DRO does not mean that you petitioned for bankruptcy but you have used an Insolvency process to deal with your debts and this will be visible on the Insolvency Register. The safest thing to do is to ask the Home Insurance company whether this is relevant rather than run the risk of not declaring something and your insurance application being incorrect.


Will a DRO stop me from getting a student loan?


Not at all. Student Loans are available to everyone regardless of credit history. Everyone has the same opportunity of getting one providing that it is your first higher education qualification.


Will my landlord be informed of my DRO?


It is always worth checking your tenancy agreement before entering into a debt solution of any type. Sometimes there is a clause that means you are at risk of the tenancy being terminated in the event of insolvency. Debt Relief Orders are listed on the Insolvency Register, this is a Public Register and can be viewed at the Insolvency Service website. There may not be any requirement to notify your landlord of the Debt Relief order but this information is visible on a credit reference agency search.


What if my circumstances change?


If you have a change of circumstances during the course of the DRO you are usually required to identify this to the DRO Unit or the Approved Intermediary who submitted your application.

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