A debt relief order is often known as Stepchange dro, it is a one kind of way to clear all your debts. This is generally suitable for people with a comparatively low level of debt, & comparatively few properties as well as assets. (i.e. valuable belongings of value like a house or car). If a debt relief order is the right choice for you, this might be a simpler as well as a cheaper option to bankruptcy.
And , if you are successful in the application, a debt relief order means you won’t need to pay back certain debts. But, at the end of the debt relief order period (generally 1 year), any debts involved within the debt relief order will be discharged so you won’t need to repay them at all.
In order to be eligible you should meet all the below mentioned criteria:
- The debts are not more than 20,000 pounds
- you have restricted spare money ( not more than 50 pounds to spend every month, after national insurance, tax, & all the household expenses)
- your properties are worth no more than 1000 pounds total!
So, if you are currently in the middle of bankruptcy, an Individual Voluntary Arrangement, or any other formal insolvency-oriented procedure, you won’t be able to opt for the debt relief order. However, if one of your creditors has put in a court request for making you bankrupt, then you can ask for the permission in order to apply for a debt relief order instead.
How to apply for a Stepchange DRO?
In order to apply for dro, you will be required to find a reliable as well as licensed debt adviser. Also known as an ‘approved intermediary’ – you cannot apply on your own. It costs a minimum amount to apply for a DRO; however, there are some debt charities that might help you to pay this.
Your hired debt advisor can help you finish the debt relief order application form & define the process for you. Then they’ll check each and every detail of your personal situation to assure you meet all the qualifying criteria. And when they have validated the application.
What are the advantages and disadvantages of a debt relief order?
A Debt Relief Order’s Advantages
Filing a debt relief order has lots of advantages. A DRO is an excellent option for people who are dealing with a little amount of debt and need a quick and reasonable approach to get out of it.
A Debt Relief Order’s Disadvantages
There are substantial advantages to join a DRO. The fact that homeowners are ineligible to apply is perhaps the biggest roadblock to people entering a DRO. As a result, if you own your own house, you will be unable to apply for a DRO. Only people with very little assets are eligible to qualify for a DRO, which is a financial limitation that goes even farther.
What is the affect of a Stepchange DRO on your life?
A Debt Relief Order (DRO), like filing bankruptcy, can have substantial consequences in many areas of your life. Where as a DRO can certainly help you get out of debt. It can also make other elements of your life more challenging. What impact will a DRO have on your bank account, mortgage, credit score, or even your relationship? The first thing to keep in mind is that a DRO will stay on your credit report for a total of six years. As a result, borrowing money will be extremely difficult, and often more expensive, during this period.
What can be included in Stepchange DRO?
Well, ‘Qualifying debts’ which can go into a DRO involve:
- overdrafts, credit cards,& loans
- benefits overpayments
- purchase now pay later process
- business debts
- Utility bills, arrears on rent, telephone bills, income tax, & council tax.
What is step change debt relief order UK is all about it. Thanks for reading our blog. To know more, contact stepchange number 03338803165.