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£2.3 Billion of consumer debt written off in just 10 years with DROs

Friday, 12th April 2019

Since the introduction of Debt Relief Orders (DROs) back on 6th April 2009, 254,000 consumers have successfully applied for a DRO and as a result written off £2.3 Billion of debt.

DROs are seen as a softer form of insolvency for people that have a certain amount of debt, little disposable income and few assets and designed to place the least complicated debt discharge cases on a fast-track through the court system with no personal appearance at court required.

What debts can you put into a DRO?

You can include:

  • Consumer unsecured debts such as credit/store card, bank overdrafts, payday/bank loans and catalogues
  • Benefit over payments that are not subject to any fraud investigation
  • Council tax & general househld bills such as gas, electric, telephone and rent
  • Items on finance

When first set up the limit for the amount of debt that could go into a DRO was £15,000, however this ceiling was increased to £20,000 in October 2015, as was the asset limit being raised from £300 to £1,000.

12 months after the approval of the DRO and provided there was no change to the circumstances then those debts that featured in the DRO will be written off. 

The impact of Debt Relief Orders (DROs) on bankruptcy numbers

For the first time, in 2013, there were more DROs than bankruptcies.


Year Total Bankruptcies IVAs DROs
2009 134,142 74,670 47,641 1,831
2010 135,089 59,194 50,716 25,179
2011 119,943 41,876 49,058 29,009
2012 109,640 31,787 46,674 31,179
2013 100,998 24,571 48,881 27,546*
2014 99,223 20,345 52,190 26,688
2015 80,404 15,845 40,384 24,175
2016 90,657 15,044 49,417 26,196
2017 99,219 15,105 59,220 24,895
2018** 115,299 16,582 71,034 27,683
2019*** 00000 00000 00000 00000

* For the first time, in 2013, there were more DROs than bankruptcies. ** Figures complete for 2018. *** First quarter of 2019 due April 2019.

We have a full list of all the consumer insolvencies since records began back in 1960, you can view them here Insolvency figures since 1960

Source for the insolvency numbers above The insolvency Service

How do you apply for a DRO?

DROs are applied for online, with the help of an authorised debt adviser / intermediary such as the Citizens Advice or StepChange. Upon receipt of the application and payment of the fee £90, an Official Receiver is able to make the order, administratively, without the involvement of the court if it appears that the applicant meets the requirements. Around 98% of DROS are approved within 48 hours.

The Official Receiver is able to refuse to make an Order or can choose to delay the decision pending further information from the applicant. A DRO normally runs for 12 months with no payment made during tjhat time to the creditors in the arrangement.

According to The Insolvency Service between 2009 and 2017, while 64% of DROs were granted to women, both genders experienced similar levels of average debt – £9,200 for women compared to £9,100 for men.

Is there a downside?

As with any debt remedy it will be on the credit file of the applicant for six years. Sometimes the individual that has had a DRO approved can be asked by insurance providers if they have ever been insolvent.

Liz Thomas, Head of Debt Relief Orders for the Insolvency Service, said:

"Reaching the 10-year anniversary since the first DRO was approved is a significant milestone and we are immensely proud of the role we have played in helping a substantial number of people out of debt.  DROs are a partnership with the debt advice sector who we have worked closely with during this past decade to ensure people are provided with every opportunity to lift themselves out of financial difficulties."

The Insolvency Service full press release here 

Mike Thomas, Founder of DebtWizard.com said:

"DROs are not for everyone but when appropriate they can be a very good remedy of dealing with excessive borrowing, more so when it is proved the debtor/borrower has less than £50 per month to pay towards their debts.

There is a downside however, with a very small application fee this leaves virtually zero money for The Insolvency Service to fully investigate applications. That said the DRO can be revoked if 'someone else' makes the Insolvency Service aware of any misdemeanors. There is also no incentive for the consumer to improve on their circumstances because if they get a job or change employment or do more hours and receive additional income then that could easily revoke the DRO if they are re assessed and found they can afford to pay more than £50 per month to their creditors.

It's obviously now a popular debt relief option as it has worked well for over a quarter off a million who have so far either completed or are coming to the end of their DRO."

More information with further Q & As here Debt Relief Orders (DROs) 

Your Debt Solutions/Options

There are a number of options available to help you deal with your debt and you can get professional advice to help you decide which is the right one for you.

A summary of each of the options is here Debt Solutions Explained & Debt Solutions Comparison Table

You should not have to pay for the advice. You can find regulated advisers who will give you initial advice free of charge or refer to the list of not for profit organisations here Debt / Advice Help





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