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Debt Relief Orders, or DRO's, can be used to erase your debts if you owe less than £15,000 and have less than fifty pounds to pay towards your outstanding loans and debts and have assets (typically savings) of less than £300. In other words, you have to be pretty broke in order to use a Debt Relief Order, but nevertheless they have their uses and are being applied for in increasing numbers by people for whom bankruptcy would be the only alternative to their financial situation. Applying for a DRO is very simple - an application is made to the Insolvency Service and costs you £90; the relief order lasts for 12 months and after that you are debt free. There are also some approved third-parties who can accept and process the application for you such as National Debtline, Citizens Advice Bureau, CCCS and Payplan. During the 12 month period of the order, your creditors are not allowed to take any action against you for collection, calling you, writing letters to you demanding repayment or taking you to court. The ease with which a Debt Relief Order may be applied for is countered by the very strict restrictions for getting them accepted and it is worthwhile going in to these in detail here: You must have debts under £15,000; You own assets or savings of less than £300; You have a car valued at less than £1,000; You are not a bankrupt or going through an IVA (insolvency Voluntary Arrangement); You are not waiting to be made bankrupt because your creditors have applied for a bankruptcy order which has not yet been given; and You have not had a debt relief order given to you in the last 6 years. Typically, the debts which are relieved by a DRO include: Credit cards; Hire purchase; Loans; Utility bills; Council tax; or Rent owed. Debt Relief Orders do not wipe out certain other types of debt such as amounts owed for child support, student loans and court fines. You must check very carefully what debts you have and whether a Debt Relief Order will work to erase them after it has been granted. Before you consider a DRO it is essential that you take independent and professional advice on how to use the variety of measures which are available to help you with your financial issues. A Debt Relief Order is not suitable for everyone and in certain cases, a simple

consolidation loan may be more appropriate or if debts are greater than £15,000, you may need to consider taking out an IVA, or Insolvency Voluntary Arrangement which will reduce your debt repayments and write-off a substantial amount of your debt. If this sounds confusing, it may be because it is - this is why you need to take advice as soon as possible - there are a wide range of measures available and the outcome from using any one of them will be much better if you deal with your issues now instead of tomorrow.

This article was commissioned by Talk About Debt provides a single, one stop forum equipped with a wide range of free resources including leading debt relief charities and organisations. Sign the petition for giving bankrupts access to basic bank accounts here:

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Using a debt relief order to escape debt.  
Using a debt relief order to escape debt. is a great resource if you having problems debt consolidation, free consul...