Changes to Eligibility Criteria for Debt Relief Orders

May 12, 2021

By Eden 12th May 2021

Debt relief orders were introduced in 2009 with the aim to provide debt relief for those with a relatively low level of unmanageable debt, no assets and little to no disposable income. The order freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period, then all of the debts included will be written off.

From 29th June 2021 the eligibility criteria for a debt relief order is going to change, meaning more people in financial difficulty will be able to apply for it.

The current eligibility criteria are as follows:

  • Your debt level must be below £20,000
  • Your disposable income must be less than £50 per month
  • You cannot own a car worth more than £1,000
  • You cannot be a homeowner
  • You have lived or worked in England and Wales within the last 3 years
  • You have not applied for a DRO in the last 6 years

The eligibility from 29th June 2021 are as follows:

  • Your debt level must be below £30,000
  • Your disposable income must be less than £75 per month
  • You cannot own a car worth more than £2,000
  • You cannot be a homeowner
  • You have lived or worked in England and Wales within the last 3 years
  • You have not applied for a DRO in the last 6 years

The new criteria follow a consultation earlier this year. The changes are due to come into effect on 29 June to coincide with the end of the first 60 days of the government’s Breathing Space scheme, which began on 4 May 2021.