Debt Relief Orders, No ones Solution

For years the Citizens Advice Bureau have been asking the Government for a good debt solution for people with very little in the way of assets and low disposable income, and the new Debt Relief Orders are the Government's answer. What a pity that nobody can get them!

In order to be eligible, you need to have assets worth less than 300. That means that anybody with property, a CD collection or a well-stocked fridge is automatically excluded. You also need to have disposable income of under 50 per month after "normal" household expenses- which means that your income needs to be very low.

Just like in other formal debt solutions, your income and expenditure will need to be carefully monitored by an industry professional to ensure that you remain eligible for the duration of the Debt Relief Order. If your income increases during the year and you can afford over 50 per month, your Debt Relief Order will fail and you will have to choose an informal debt management plan or Bankruptcy instead.

There are major benefits to a Debt Relief Order, like in all formal debt solutions such as Individual Voluntary Arrangements (IVAs) or Bankruptcy. Your creditors will not be allowed to contact you or chase you for your debts, and after the Debt Relief Order is finished (usually after 1 year) your remaining debt will be written off.

However, in order to apply for a Debt Relief Order you will need to find one of the few companies in the country who are authorised to provide one. At the time of writing, only 5 registered charities and one private debt management company will provide Debt Relief Orders in the UK.

I hope that the government will revise the requirements for a Debt Relief Order to allow more people the opportunity to use this new, simple measure. Until then, we have to accept that informal debt management plans, and more formal solutions such as Bankruptcies and IVAs are the only real options for most people!
Author: LiamJames