DRO numbers reach record high after fee scrapped

The number of people benefitting from a debt relief order (DRO) soared to a record high in April, after the £90 fee was scrapped.

Figures from the Insolvency Service show 3,436 DROs were taken out in April - more than in any other month since they were introduced back in 2009.

Here at Money Wellness, we warmly welcomed the government’s recent decision to scrap the £90 fee, as our research indicated the cost of applying was stopping 44% of those eligible for a DRO from accessing the solution.

Our own figures also underline the impact scrapping the fee has had.

We were delighted to help 1,843 customers get a DRO last month, up from 1383 in March.

A brighter financial future

Commenting on the rise in numbers, our director of external relations, Sebrina McCullough, said:

“The spike in DRO figures for April confirms our belief that the £90 fee was preventing many of those experiencing the worst financial hardship from accessing crucial help. We’re delighted this obstacle has been removed so that more people have the chance to build a brighter financial future.”

A step further

Having dropped the DRO fee, we’re now asking the government to take it one step further by getting rid of a court fee that is making it harder for survivors of domestic abuse to rebuild their lives.

It’s not uncommon for survivors of domestic abuse to end up applying for an insolvency solution, like a DRO, after escaping a relationship with little more than the clothes they stand up in but saddled with debt.

If you’re granted an insolvency solution, your details - including your address - are usually made public in the insolvency register.

It’s possible for those at risk of violence to ask for their address to be withheld from the register.

But to do this, they need to apply for a person at risk of violence (PARV) order at a cost of £308.

We’re asking the government to drop this unfair fee, so that domestic abuse survivors aren't being denied the chance of a fresh start.

More about DROs

If you can't afford to repay your debts, it's possible a DRO could help you get back on track with your money.

What is a DRO?

A DRO is designed to help people who don’t own anything of much value and have very little disposable income to write off debt they can’t afford to repay.

If you’re granted a DRO, your debts are frozen for 12 months. If your financial situation doesn’t improve during that time, your debts are written off.

Who qualifies for a DRO?

A DRO may be suitable for you if:

• you owe £30,000 or less – this is increasing to £50,000 on 28 June
• you’re not a homeowner
• your vehicle (if you have one) is worth no more than £2,000 – this is increasing to £4,000 on 28 June
• you have £75 or less left over each month after you’ve covered the essentials

Things to bear in mind

• A DRO will affect your credit rating for six years making it difficult to borrow during that time.
• If your situation improves during the 12 months, your DRO may end meaning you’ll need to make arrangements to repay your debts.