Debt Relief Order UK - Eligibility, Debt Limits and How to Apply in 2026

Understand how a Debt Relief Order works, who qualifies, which debts can be written off, how it affects your credit rating and what it means for renting, mortgages and property ownership.

A Debt Relief Order (DRO) is a formal debt solution designed to help people in England and Wales who have relatively low incomes, limited assets and debts they cannot realistically afford to repay.

A Debt Relief Order can provide protection from creditors and, if the relevant conditions are satisfied, lead to qualifying debts being written off after a 12-month period.

For individuals experiencing financial difficulties because of credit cards, personal loans, overdrafts, utility arrears or other unsecured debts, a DRO may offer an alternative to bankruptcy.

However, eligibility is subject to strict financial criteria. Applicants must satisfy limits relating to their total qualifying debts, disposable income, assets and vehicle ownership.

A Debt Relief Order can also affect credit records, financial arrangements and future borrowing, making it important to understand the consequences before applying.

For tenants, homeowners and landlords, the relationship between debt relief, housing costs and property ownership is particularly significant.

What Is a Debt Relief Order?

A Debt Relief Order is a formal insolvency procedure available in England and Wales.

It is intended for people who cannot afford to repay their qualifying debts and have little spare income or valuable assets.

DROs are administered by the Insolvency Service, and applications must be submitted through an approved debt adviser.

Once a DRO is approved, creditors included in the order are generally prevented from taking enforcement action to recover the covered debts without the court's permission.

The DRO normally lasts 12 months.

If the applicant's circumstances do not change in a way that affects eligibility and the order is successfully completed, the qualifying debts are usually discharged.

A Debt Relief Order is not the same as a debt consolidation loan or an informal repayment arrangement.

Debt Relief Order Eligibility in 2026

To qualify for a Debt Relief Order, applicants must meet several financial and legal requirements.

The current eligibility criteria in England and Wales include:

Applicants must also be unable to pay their debts and must not be subject to certain other formal insolvency proceedings.

An approved debt adviser will assess these requirements before submitting an application.

What Is the Debt Relief Order Debt Limit?

The Debt Relief Order debt limit is £50,000.

This means the total qualifying debts included in the application must not exceed the permitted threshold.

For example, an applicant may owe:

In this example, the total is within the DRO debt limit.

However, the applicant must also satisfy the income, assets and other eligibility requirements.

What Is the Debt Relief Order Income Limit?

A person applying for a DRO must generally have no more than £75 per month in disposable income after reasonable essential household expenses.

Disposable income is the money remaining after accounting for necessary living costs.

These may include rent, food, utilities, transport and other reasonable expenditure.

For example:

In this example, the applicant's disposable income is within the £75 threshold.

However, the approved adviser must assess whether the expenditure is reasonable and whether the applicant meets the other requirements.

Debt Relief Order Asset Limit

Applicants generally must have less than £2,000 in countable assets.

Assets may include savings, investments and valuable possessions.

Certain essential household items, tools used for employment and other exempt assets may be excluded from the calculation.

A qualifying vehicle worth up to £4,000 may also be disregarded.

Applicants should provide accurate information about everything they own.

Attempting to conceal assets can result in an application being refused or an existing DRO being revoked.

Can You Get a Debt Relief Order If You Own a Car?

Yes, potentially.

A person may generally keep one qualifying domestic vehicle worth no more than £4,000.

Special rules may apply to vehicles adapted for use by someone with a qualifying disability.

The relevant figure is the vehicle's current value rather than its original purchase price.

A debt adviser can assess whether the vehicle meets the applicable exemption.

Can Homeowners Apply for a Debt Relief Order?

Homeowners are generally ineligible for a Debt Relief Order.

This is because ownership of residential property usually means the applicant has assets exceeding the permitted threshold.

Even where a property is subject to a mortgage, the applicant's ownership interest can affect eligibility.

A homeowner experiencing serious debt problems may need to consider other solutions, including a debt management plan, an Individual Voluntary Arrangement or bankruptcy.

These alternatives can have significant consequences for property ownership and should be considered with independent debt advice.

What Debts Can Be Included in a Debt Relief Order?

A DRO can cover many common unsecured debts.

Qualifying debts may include:

• Credit card balances.

• Personal loans and overdrafts.

• Catalogue debts and buy now, pay later agreements.

• Rent arrears.

• Council Tax arrears.

• Gas, electricity and telephone arrears.

• Certain benefit overpayments.

• Certain tax debts.

• Money owed to friends or family.

• Certain business debts.

The applicant should disclose all outstanding liabilities to the approved adviser.

Failing to include qualifying debts can create complications because debts generally cannot be added after the order is approved.

What Debts Cannot Be Included in a DRO?

Some debts are excluded from Debt Relief Orders.

Examples include student loans, child maintenance liabilities, certain court fines, Social Fund loans and certain compensation awards for personal injury or death.

Debts secured against property or other assets are also treated differently.

A DRO does not eliminate every financial obligation.

Applicants must continue paying excluded debts and ongoing household expenses.

How to Apply for a Debt Relief Order

You cannot submit a DRO application independently.

Applications must be made through an approved debt adviser, sometimes called an approved intermediary.

The process generally involves:

1. Contacting an approved debt advice organisation.

2. Explaining your financial difficulties.

3. Providing details of income and household expenditure.

4. Listing all outstanding debts and creditors.

5. Disclosing savings, vehicles and other assets.

6. Reviewing eligibility and alternative debt solutions.

7. Authorising the adviser to prepare the application.

8. Having the application submitted to the Insolvency Service.

9. Waiting for the decision.

If approved, the applicant receives confirmation of the DRO and the restrictions that apply.

Where Can You Get Free Debt Relief Order Advice?

Several organisations provide free debt advice in England and Wales.

These include Citizens Advice, National Debtline, StepChange and other approved debt advice providers.

MoneyHelper can also help individuals identify appropriate free debt advice services.

It is important to use an approved intermediary because the application cannot be submitted directly by the debtor.

How Much Does a Debt Relief Order Cost?

A Debt Relief Order is free to apply for.

The previous £90 application fee was abolished in April 2024.

Approved intermediaries are not permitted to charge applicants for assistance with submitting a DRO application.

People considering a DRO should not assume that they need to pay a commercial company to obtain one.

How Long Does a Debt Relief Order Last?

A DRO normally lasts 12 months.

During this period, qualifying creditors are generally prevented from pursuing the covered debts.

The debtor must comply with the applicable restrictions and report relevant changes in circumstances.

At the end of the period, qualifying debts are normally written off.

However, the order may be revoked if the debtor no longer satisfies the requirements or has provided inaccurate information.

What Happens After 12 Months?

When a DRO successfully reaches the end of its normal 12-month period, the debtor is generally discharged from the qualifying debts included in the order.

This means those debts no longer need to be repaid.

However, excluded debts remain payable.

The DRO also remains visible on the debtor's credit record for six years from the date it was approved.

Does a Debt Relief Order Affect Your Credit Score?

Yes.

A Debt Relief Order is recorded on the applicant's credit file and normally remains there for six years.

This can make it more difficult to obtain loans, credit cards, mortgages and other forms of credit.

The impact may continue after the DRO itself has ended.

However, the longer-term effect depends on the individual's wider credit history and subsequent financial circumstances.

Can You Get a Mortgage After a Debt Relief Order?

Obtaining a mortgage after a DRO may be difficult, particularly while the order remains on the credit file.

Mortgage lenders consider credit history, income, affordability, deposits and previous insolvency arrangements.

Some lenders may decline applications from borrowers with recent DROs.

Others may consider applications after a sufficient period has passed, subject to their lending criteria.

A DRO does not create a permanent legal prohibition on obtaining a mortgage.

However, borrowers should expect additional scrutiny.

Can You Rent a Property with a Debt Relief Order?

Yes. Having a DRO does not automatically prevent someone from renting residential property.

However, a DRO may affect referencing and affordability assessments.

Landlords and letting agents may consider an applicant's credit history when assessing a tenancy application.

Some applicants may need to provide additional evidence of income or discuss acceptable alternatives where permitted.

Tenants should be accurate about their financial circumstances when completing applications.

Debt Relief Order and Existing Tenancy Agreements

A DRO does not automatically terminate every existing tenancy.

However, tenancy agreements and individual circumstances can affect the legal position.

Some tenancy agreements may contain insolvency-related provisions.

Where a tenant has rent arrears, the landlord may still have grounds to pursue possession through the applicable legal process.

Tenants should seek specialist housing advice before applying for a DRO if they are concerned about losing their accommodation.

Can Rent Arrears Be Included in a Debt Relief Order?

Yes. Qualifying rent arrears can be included in a DRO.

However, this does not necessarily remove the risk of eviction.

A landlord may still pursue possession where the relevant legal grounds are established.

For example, a tenant who has accumulated substantial rent arrears may remain at risk of possession proceedings even where the debt is included in a DRO.

Tenants should discuss their circumstances with an experienced debt adviser and housing specialist before proceeding.

Do You Still Have to Pay Rent During a DRO?

Yes.

A DRO does not remove the obligation to pay ongoing rent.

Tenants must continue meeting their current housing commitments.

If new rent arrears arise after the DRO is approved, those new debts will not automatically be covered.

Maintaining regular rent payments is therefore particularly important.

Debt Relief Order and Council Tax

Qualifying Council Tax arrears can be included in a DRO.

However, the debtor must continue paying Council Tax liabilities that arise after the relevant date.

Council Tax Reduction may be available to households with low incomes, depending on local authority rules.

Applicants should investigate whether they qualify for assistance with ongoing Council Tax payments.

Debt Relief Order and Utility Bills

Gas, electricity and other qualifying utility arrears may be included in a DRO.

However, customers must continue paying for new energy usage and other ongoing services.

People struggling with utility costs should speak with their providers about affordable payment arrangements and available support.

Debt Relief Order and Universal Credit

Receiving Universal Credit does not automatically prevent someone from qualifying for a DRO.

Eligibility depends on disposable income, assets, debts and other statutory requirements.

Certain benefit overpayments may qualify for inclusion in a DRO.

However, not all DWP debts are treated identically.

Applicants should ask their debt adviser to check which liabilities can be included and how any existing deductions may be affected.

Debt Relief Order and Employment

A DRO does not generally prevent someone from working.

Applicants can be employed or self-employed, provided they meet the eligibility requirements.

However, some professions and regulated roles may have restrictions relating to insolvency.

Anyone working in a regulated occupation should check the relevant professional rules.

An increase in income during the DRO period must be reported where required.

Can You Be Self-Employed with a DRO?

Yes, potentially.

Self-employed individuals may qualify if their financial circumstances satisfy the DRO conditions.

However, restrictions apply to business activities.

For example, a debtor may need to disclose their DRO when carrying on business under a name different from the one in which the order was made.

Self-employed applicants should discuss business debts and assets with their adviser.

What Restrictions Apply During a Debt Relief Order?

During the DRO period, certain restrictions apply.

These include restrictions on borrowing more than £500 without disclosing the DRO to the lender.

There are also restrictions relating to acting as a company director and managing certain business activities.

A debtor must comply with these requirements throughout the applicable period.

Breaching the restrictions can result in serious legal consequences.

Can a Debt Relief Order Be Cancelled?

Yes.

A DRO may be revoked if the debtor's financial circumstances change significantly or the order was obtained using inaccurate information.

For example, receiving a substantial inheritance or acquiring valuable assets could affect continued eligibility.

Applicants must notify the Insolvency Service about relevant changes.

The consequences depend on the circumstances and the applicable rules.

Debt Relief Order vs Bankruptcy

A DRO and bankruptcy are both formal insolvency procedures, but they are designed for different circumstances.