Enforcement Restriction Order (ERO)

An Enforcement Restriction Order (ERO) is new and is designed to help debtors that have experienced an unforeseen change in their circumstances. This is not yet available as it is in its consultation process.

The article is in two sections, one the current position that is available to debtors and two, the key points of the proposed ERO.

Part one - The current situation available to a debtor

Admin Orders

Debtors can propose an Admin Order (AO) for debts below £5,000 provided there is one judgement in place, CCJ. This has not been updated for 21 years and is no real good to today's overstretched debtor. Once the order is made then no interest can be applied nor can any creditor enforce their debt without the leave of the court.

It is proposed to raise this to be in line with a Debt Relief Order (DRO), due soon, to £15,000 and define what debts cannot be included. And with a max 5 year time limit.

Debtors will require to take a statement of truth declaring their full level of debts to prevent abuse of the system.

For example if there were 60 payments at £250 per month this would equate to £15,000. Creditors will get paid in full minus any court costs, good return for creditors, but cannot add interest, incentive for debtor, this would remove the necessity for low level Individual Voluntary Arrangements, IVA's. The £15,000 limit will be kept under review.

Will only apply in England and Wales.

Part two - Enforcement Restriction Order (ERO)

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