A debt relief order is an effective way to manage your personal debts, but only if you owe less than £30,000 to creditors.
Debt relief orders in the UK freeze your debt repayments for 12 months. At the end of this period, they’re often written off completely.
If you’re considering a debt relief order, the team at Irwin Insolvency is here to explain everything you need to know.
What Is a Debt Relief Order?
A debt relief order halts your repayments to creditors, meaning you no longer have to pay back creditors to whom you owe money.
Debt relief orders also stop creditors from chasing you for payments and demanding money. At the end of the order, you could see your personal debts wiped clean.
Debt relief orders only affect certain qualifying debts, which are generally personal, unsecured debts. This might include:
- Credit card bills
- Hire purchase agreements
- Buy now pay later schemes
Am I Eligible for a Debt Relief Order?
Debt relief orders are an effective alternative to bankruptcy, but are only allowed if your debts total £30,000 or less. Above this, you’ll need to consider other options such as bankruptcy or an individual voluntary arrangement (IVA).
You also need to have assets that total less than £2,000, you can’t own your home outright, and you can only have £75 or less remaining after your current repayments have gone out of your accounts each month.
If you meet these qualifying parameters, a debt relief order works by stopping your repayments. This buys you valuable breathing space to reorganise your finances. If your situation hasn’t changed at the end of the defined period, your remaining debts are often wiped out completely.
How Can I Apply for a Debt Relief Order?
To get a debt relief order, you must first approach an insolvency advisor. They’ll consider your personal circumstances and, if they agree that a debt relief order is the most effective option for you, they’ll prepare your case for court.
This can take several weeks, as your case is processed and assessed by an official receiver appointed by the court. Your case will then be overseen by an official receiver who ensures that you stick to the terms of your order.
How Long Do Debt Relief Orders Last?
The length of time a debt relief order lasts is set by the official receiver overseeing your case. In ordinary circumstances, it should last no longer than 12 months. Throughout this 12-month period, you won’t have to make repayments and creditors can’t legally chase you for payments.
Can a Debt Relief Order Stop Bailiffs?
Unfortunately, a debt relief order can’t stop bailiffs from selling your personal belongings if you’ve already had a controlled goods agreement enforced against you. They are legally within their rights to take your personal assets if you’ve stopped paying for them.
How Irwin Insolvency Can Help With Debt Relief Orders?
If you’re struggling to pay your debts, then Irwin Insolvency’s experienced team is here to help. As part of our debt management services, we can provide impartial debt advice on debt relief orders that could turn your finances around. However, if you have debt that is over £30,000 – you may need to look into a debt management plan.
Contact Irwin Insolvency today to find out more.
Get in Touch
With over 25 years of experience, helping people just like you, we are committed to providing you with all the help and advice you need during these challenging times. Simply give us a call, drop us an email or fill in the form to find out how we can help you.
Irwin & Company,
West Midlands B72 1TU
0800 254 5122
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