Applying for a Debt Relief Order with CAP

All you need to know about applying for a Debt Relief Order with CAP. 

A Debt Relief Order (or DRO for short) is a debt solution that’s ideal for people who have a relatively low level of debt, who are on a low income and who have few or no assets. It’s a legal process designed to clear most debts included in it. You don’t have to go to court to apply, and you’ll pay a fee of £90 per person to the Insolvency Service.

Please note the following information applies only to people living in England, Wales and Northern Ireland. If you are from Scotland you may want to visit this page about a Minimal Assets Process.

To apply for a DRO in England and Wales:

  • You must have no more than £30,000 of qualifying debt.

  • You must have no more than £75 of disposable income per month (this means the money left over after you’ve paid all your living costs each month, such as food, rent and bills).

  • Your car or other motor vehicle, if you have one, must be worth no more than £2,000.

  • Any other assets, if you have them, must be worth no more than £2,000.

  • You must not have had another DRO within the last six years.

To apply for a DRO in Northern Ireland:

  • You must have no more than £20,000 of qualifying debt.

  • You must have no more than £50 of disposable income per month (this means the money left over after you’ve paid all your living costs each month, such as food, rent and bills).

  • Your car or other motor vehicle, if you have one, must be worth no more than £1,000.

  • Any other assets, if you have them, must be worth no more than £1,000.

  • You must not have had another DRO within the last six years.

Your application may not be accepted if you have paid more to one of your creditors (including friends or family members) than the others, or transferred any assets into someone else’s name. CAP will also arrange to see a copy of your credit report before we apply for your DRO.

If you decide to work with us, we’ll let you know whether a DRO would suit you as part of your CAP Plan. Let’s take a look at the DRO process – you might be surprised at how simple it is.

How do I apply for a DRO?

1. Getting started

You’ll receive a letter from CAP explaining your insolvency advice along with a copy of the Full client agreement, which you need to sign and return. If your case has just been set up, your Debt Coach may have already discussed this with you.

2. Paying for your DRO

It costs £90 per person to apply for a DRO. This is a fee you’ll have to pay to the Insolvency Service. This is not a fee payable to CAP for our service which is, and will always be, free of charge.

3. Your credit report

To apply for a DRO for you, we’ll need to see your credit report to check that none of your debts are missed off your application. If you’re a new client, we’ll ask you to sign a Credit report consent form which will allow us to access your credit report.

4. Pre-application check

Next, we’ll carry out a pre-application check. CAP’s experienced Debt Advisors will make sure we’ve got everything in place to go through the DRO on your behalf.

5. Submitting your application

When your application is ready, we’ll send the documents to you in the post to check. We may also arrange a phone call with you if necessary. Once you’ve confirmed you’re happy with your application, we’ll submit it online to the Insolvency Service.

6. Approved!

Your application is done! It usually takes three to five working days for the Insolvency Service to approve it. After that, the creditors included in your application can no longer chase you for payment.

Questions

As soon as your DRO is granted, the qualifying debts listed in your application are effectively written off. Some debts won’t be cleared in a DRO, including magistrates’ court fines, CSA/​maintenance arrears, student loans, social fund loans and any fraudulent debt.

No, one of the great things about a DRO is that there’s no risk of your possessions (or assets’) being seized and sold.

Your debts are written off as soon as your DRO is granted. It’s a permanent arrangement – it’s not delaying repayment, it’s writing off the debt. However, for the twelve months after your DRO is approved, some conditions will apply. Read the next question to find out more.

During the first twelve months after the DRO is approved, it can be cancelled and your debts reinstated if your financial situation changes. This can include things like being given a lump sum of money, gaining a valuable asset, or if your disposable income goes up because you are earning more.

The DRO will appear on your credit report for six years from the date it is approved. It will also be listed in the public domain on the Insolvency Service’s online register for 15 months, including your name and address.

For the year of your DRO, you can’t hold certain jobs, including being a solicitor, trustee of a charity or director of a limited company. 

If you wish to borrow another £500 or more, you must tell that creditor that you are already in a DRO.

If you hold power of attorney over another person’s finances (or if someone holds power of attorney over your finances) this would be cancelled. You could reapply after your DRO ends. Financial power of attorney is where you are legally allowed to make decisions on behalf of the other person in relation to their money, or help the other person to do so.

Go back to other potential routes out of debt