Debt Relief Order – Get Back to Financial Freedom

The worst nightmare a debtor could ever have is going to bankrupt. It could be you if you are losing control on your money and missing debt repayments. if you want to regain control of your finances and live a more fulfilling life ever again, you need to banish the debt. For this, you have to organize your finances by creating a budget and saving as much as you can. Will it help you expunge all your debts? ‘No’ for the majority. Then what would be the possible solution? You need a suitable debt management plan to pay off your debt and live a more fulfilling life.

How effective a debt solution will be for you depend on the number of creditors and how much you owe them. For instance, DRO (Debt Relief Order) is an effective solution if your debts are less than £20,000 and don’t have any sizable assets – and, you couldn’t manage the repayments. It is the most appropriate alternative to full bankruptcy, provided you do not have your own home.

How long DRO process takes?
It takes a year to process once DRO is made on your behalf. These 12 months are known as ‘moratorium period’ in which you would not make any payment for the debts included. Entering into this period may sound serious, but it is merely certain limitations that will be placed upon you till the DRO is being processed. Unlike Individual Voluntary Arrangement (IVA), you will be saved from bankruptcy within 12 months with the debt relief order.

How long DRO will on your credit file?
Once entered into DRO, the record will remain on your credit file for 6 years from the date it was made. It means you may not be able to get credit for this time span and it could be some time before you can borrow money in the future. Remember, you may not be permissible to open a new bank account with DRO being processed and for some period after it’s concluded.

Impact of DRO on your credit rating
It is an open fact that poor credit ratings make difficult for people to get loans because lenders usually don’t trust them for timely debt clearance. If you had a debt relief order in the past or got it now, it will not affect your credit reputation, but also your bank may freeze your account or won’t open a new one. Moreover, the options of purchasing a property will be limited under a DRO – your tenancy request may be turned down or you have been charged higher fees. But if you have timely paid off the debt it won’t trouble you much.

Is DRO a Right Solution for me?
The best way to figure it out is to get free debt advice from financial advisors such as ours at IVA Experts UK. You can think about some other debt solution if you don’t feel comfortable with debt relief order. Depending on the amount you owe, you can use IVA calculator to see of IVA could work for you, especially when you have to deal with multiple creditors for huge debts.