All Debt Solutions
Debt Relief Order (DRO) vs IVA
A Debt Relief Order (DRO) is a formal insolvency solution for people with low income, few assets, and debts of £30,000 or less. After 12 months, qualifying debts are written off completely.
How Debt Relief Order (DRO) Works
- 1You apply through an approved intermediary (e.g., Citizens Advice)
- 2The application fee is £90
- 3You must owe £30,000 or less in qualifying debts
- 4Your surplus income must be £75 or less per month
- 5Your assets must be worth £2,000 or less
- 6After 12 months, debts included in the DRO are written off
DRO Advantages
- All qualifying debts written off after 12 months
- Low application cost (£90)
- No monthly payments required
- Creditors cannot chase you
- Simpler process than bankruptcy
DRO Disadvantages
- Strict eligibility criteria
- Maximum debt of £30,000
- Very low asset threshold
- Must have surplus income of £75 or less
- On credit file for 6 years
- Cannot be a homeowner
IVA vs Debt Relief Order (DRO) - Side by Side
| Feature | IVA | Debt Relief Order (DRO) |
|---|---|---|
| Maximum debt | No upper limit | £30,000 maximum |
| Monthly payments | Regular payments required | No payments needed |
| Asset threshold | Can keep assets | Assets must be under £2,000 |
| Duration | 5-6 years | 12 months |
| Homeowner | Yes - homeowners eligible | Cannot be a homeowner |
| Debt write-off | Up to 85% | 100% after 12 months |
Debt Relief Order (DRO) May Suit You If...
- People with very low income and few assets
- Those with debts under £30,000
- Non-homeowners with minimal surplus income
An IVA May Be Better If...
- Homeowners
- Those with debts over £30,000
- People with surplus income over £75/month
Need Help Deciding?
Get free, confidential advice from a qualified professional to find the best solution for your situation.
Do You Qualify?* This information is for general guidance only and does not constitute financial advice. An IVA is a formal insolvency solution - fees apply and your credit rating will be affected.