Debt Relief Order – What Restrictions Are Attached to a Debt Relief Order?
A debt relief order is a legal document that stops your creditors from taking any further action against you. It is only one of many ways you can get rid of your debts and it can be a very effective solution for people struggling with their finances. However, it is important to understand the restrictions attached to it before you apply for it.
The best way to find out if you qualify for a Debt Relief Order is to seek professional advice. You can either call a debt adviser or visit your local Citizens Advice. This will give you more information and can make you feel better about your finances.
If you apply for a debt relief order, you will have to disclose certain details about your assets and finances. Some of these details will need to be disclosed in an official letter. Also, you will need to make a declaration about any assets you have sold during the last two years.
Once you have submitted your application, you will be contacted by the official receiver. They will then decide whether or not to grant you a DRO. Your creditors may be able to object to the details of your debt included in your DRO.
Your debt relief order will not be effective until the fees associated with it are paid. These fees can range from PS90 to PS200. Payment of these can be done in instalments over six months. After the order is granted, you will not be able to make any payments to your creditors for up to 12 months.
In addition, your credit rating will be affected. This will be evident on your credit file for up to six years. There is no guarantee that your credit score will recover after the order has been lifted. Therefore, it is important to keep an eye on your credit rating. Ideally, you should avoid borrowing large sums of money during the period of the order, as the order can cause your credit rating to fall.
Depending on your circumstances, you may be able to voluntarily continue your debt relief restrictions after the DRO is lifted. Alternatively, your official receiver might be able to apply to the court for an extension. Regardless, if your circumstances improve after the DRO has been lifted, you will need to tell the official receiver.
An approved intermediary will help you with the application for a Debt Relief Order. These intermediaries will be authorised by the Insolvency Service. Approved intermediaries will not charge you a fee for completing the application, and will help you assess your eligibility for a DRO. For instance, you might not be eligible for a debt relief order if you have a history of committing fraud.
During the time that your debt relief order is in effect, you will not be able to write cheques that are likely to bounce. You will also be unable to take out an overdraft or borrow more than PS500 without telling your lender.
Debt Relief Order – What Restrictions Are Attached to a Debt Relief Order? was first seen on Apply for an IVA