Debt Relief Order – What is a Debt Relief Order?
A Debt Relief Order (DRO) is a debt management option that allows you to stop the collection process and get your debt under control. Although this option has some restrictions, it can also help you get back on track financially and may be the best solution for you if you are struggling with debt. However, it should be understood that a DRO will have a lasting negative effect on your credit rating and may prevent you from obtaining further credit. This type of order also stays on your credit record for six years, which means that you need to monitor it carefully to ensure you don’t break it. You should also know that it will affect your ability to get credit in the future, and it is not something you should try to do on your own.
Once a DRO has been issued, creditors cannot pursue debts and cannot contact you for a year. Once the period is over, the debts included in the DRO will be written off. Like a bankruptcy, a DRO comes with restrictions, including not being able to take a company directorship or take on new credit for over PS500 without disclosing your DRO status. The DRO also allows you to receive a lump sum of money to pay off your debts, which means that you won’t have to make any payments during this time.
To get a DRO, you need to declare any assets you’ve sold in the last two years. If you’ve sold a car, you will have to declare the value using a Parker’s Car Price guide. In most cases, a DRO will not be approved if you’ve sold your car for over PS1000. However, you may qualify if you have a specially adapted vehicle. Furthermore, a DRO will allow you to transfer a Motability Hire Purchase agreement into a lease hire scheme.
Debt Relief Orders are a great way to get out of debt and get a fresh start. They can be extremely beneficial as they can prevent most creditors from taking any further action against you. Although the laws regarding DROs can be complex, the fact sheet that you receive will help you navigate the process. It also contains useful contact details and links to further help. The website also has sample letters that you can fill out to present to your creditors.
Once you’ve decided that Debt Relief Orders are right for you, a professional DRO adviser will work to set up an order for your debt relief. The DRO adviser will apply to the official receiver on your behalf. The process can take up to twelve months. Once it’s granted, your payments will be paused for twelve months. Once the DRO is approved, your creditors can no longer pursue you for the debts you owe.
Before applying for a Debt Relief Order, make sure that you have a full understanding of your situation and the impact it will have on your credit. Bankruptcy will leave a negative impact on your credit score and will remain on your credit report for seven to 10 years. For this reason, it’s best to work with a qualified credit counseling company.
Debt Relief Order – What is a Debt Relief Order? was first seen on Debt Worries