# Debt relief orders explained: bankruptcy for smaller debts

> Debt help · Last updated 23 June 2026

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## Quick answer

A Debt Relief Order (DRO) is a free insolvency option for people with qualifying debts under £50,000, less than £75 monthly surplus, and few assets. Debts are frozen for 12 months then written off if your situation has not improved.

DROs were created for people who need debt relief but cannot afford the £680 bankruptcy fee and have relatively small debts. There is no application fee since April 2024. They freeze repayments for 12 months and write off qualifying debts at the end if your financial situation has not improved. They are simpler and cheaper than bankruptcy but have strict eligibility criteria.

## Key facts

- DROs are available for qualifying debts under £50,000 with less than £75 monthly surplus income
- There is no application fee — DROs have been free to apply for since 6 April 2024
- Qualifying debts are frozen for 12 months and written off at the end if circumstances have not improved
- A DRO stays on your credit file for six years and on the public Insolvency Register

## Eligibility criteria

You must owe £50,000 or less in qualifying debts, have less than £75 per month surplus after essential living costs, own assets worth no more than £2,000 (plus one vehicle worth up to £4,000), and not have had a DRO in the last six years.

You must live in England, Wales, or Northern Ireland. Scotland has the Minimal Asset Process (MAP) as its equivalent.

## How a DRO works

An approved intermediary (usually through a free debt charity) helps you apply at no cost. The official receiver reviews and grants the DRO if you qualify.

During the 12-month moratorium, creditors cannot chase you for payment. If your situation has not improved at the end, qualifying debts are written off.

## DRO vs other options

Compared to bankruptcy: DROs are free to apply for versus £680 for bankruptcy, simpler, and designed for smaller debts with fewer assets.

Compared to a DMP: a DRO writes off debt rather than requiring full repayment, but has stricter eligibility and a more severe credit impact.

## Frequently asked questions

### Can I get a DRO if I work?

Yes, if your surplus income after essential costs is less than £75 per month. Low-income workers with high debt can qualify.

### What debts does a DRO cover?

Most unsecured debts including credit cards, loans, and overdrafts. It does not cover student loans, court fines, or child maintenance.

### What if my finances improve during a DRO?

If your surplus income rises above £75 per month or you acquire assets above the threshold, the DRO may be revoked and you may need to repay debts.

## Primary source

https://www.gov.uk/options-for-paying-off-your-debts

## Related

- [Bankruptcy explained](https://moneyguide.org.uk/debt-help/bankruptcy-explained/)
- [DRO, IVA and bankruptcy compared](https://moneyguide.org.uk/debt-help/dro-iva-bankruptcy-compared/)

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.