Vermont Bankruptcy Attorney News

by wstera2

Is a Debt Relief Order the New Bankruptcy Option?

It is and should be the last option that you consider if you are in a real crisis where debt is concerned.

Bankruptcy is a very serious issue which has some adverse consequences which can make life difficult although it will ease your debt problems to a degree.

However, since April 2009, an alternative to bankruptcy has been available to those who have previously only considered Bankruptcy but either couldn’t afford the £450 fee just to apply for bankruptcy or who still wouldn’t be able to keep up with the payment arrangements under the Bankruptcy order.

The alternative is called a ‘DRO’ which stands for ‘Debt Reduction Order’. But this new DRO has been met with criticism by some people who claim that they now make bankruptcy an all too easy option. While this is true to a certain extent, a Debt Reduction Order really could be the solution for some people.

However, there are much stricter criteria to qualify for a DRO than there is for bankruptcy.

To qualify for a Debt Reduction Order you must have debts in excess of £15,000 yet your total assets cannot be worth more than £300 which means that home owners will not qualify due to the value of their house which is taken in to account as an asset.

Also, you must have a disposable income of £50 per month or less which is an incredibly low amount.

As you can see, a DRO is really designed to help those who have no real chance of ever being able to repay their debts which are leaving them with no money to live on each month.

You must realise that a Debt Relief Order is actually a form of insolvency, similar to bankruptcy, which means that the details of the order will be publicly displayed on the Insolvency Service website. The details of your DRO will be publicly displayed on the Insolvency website making it public knowledge.

The only way that you can apply for a DRO is via the services of organizations such as the Citizens Advice Bureau. Using the information on your application form they will decide if you do qualify for a (DRO) Debt Relief Order.

The Official Receiver will then review and administer the application. If they agree that your application meets all of the requirements they will accept it without any involvement of a court. But be advised, if the Official Receiver finds out at a later date that the information you supplied is inaccurate, then they may revoke the Debt Relief Order. This would also mean that you could not reapply for another DRO for a period of six years.

Further details about applying for a Debt Relief Order can be found at http://ukcreditsecrets.co.uk/blog/debt-relief-orders/debt-relief-orders-what-is-a-debt-relief-order/ where there is a full list of resources and further information to help you in deciding if a DRO is right for you.