You qualify for a DRO if you have debts under £50,000, assets under £2,000, monthly disposable income under £75, and live in England or Wales.
Check whether you meet the eligibility criteria for a Debt Relief Order in 2026.
Struggling with debts you can’t pay? A Debt Relief Order (DRO) might give you the fresh start you need. But debt relief order eligibility rules are strict, and many people assume they don’t qualify without checking properly.
The good news is that eligibility limits increased significantly in recent years. The debt limit rose from £30,000 to £50,000 in 2021, and the asset threshold jumped to £2,000. This means thousands more people now qualify for what’s often called “bankruptcy for people with nothing”.
What Is a Debt Relief Order?
A Debt Relief Order is a formal insolvency procedure that freezes your qualifying debts for 12 months. After this period, if your financial situation hasn’t improved significantly, your debts are written off completely.
DROs cost just £90 and are designed for people with low income, few assets, and no realistic prospect of paying their debts. They’re administered by the Insolvency Service and provide legal protection from creditors chasing you for money.
Gemma, 28, from Newport had £18,000 of credit card and overdraft debt after losing her job during the pandemic. She worked part-time earning £800 monthly, owned no property, and had just £400 in savings. Her DRO application was approved within six weeks, giving her immediate relief from creditor calls and letters. Twelve months later, all her debts were legally written off.
Debt Relief Order Eligibility Criteria for 2026
You must meet all five conditions to qualify for a DRO. Miss any one, and your application will be rejected.
The Five Key Requirements
- Debt limit: Total qualifying debts must be £50,000 or less
- Asset limit: Assets worth £2,000 or less (excluding basic household items)
- Income limit: Monthly disposable income of £75 or less after essential expenses
- Location: Live or work in England or Wales
- Previous DROs: No DRO in the past six years, no bankruptcy or Individual Voluntary Arrangement (IVA) in the past six years
| Eligibility Factor | 2026 Limit | What It Means |
|---|---|---|
| Total Debts | £50,000 maximum | Only qualifying debts count (credit cards, loans, overdrafts) |
| Assets | £2,000 maximum | Cash, savings, car value, valuable items |
| Disposable Income | £75 per month maximum | Income left after essential living costs |
| Property Ownership | None allowed | Cannot own your home or have interest in property |
The Disposable Income Test
This often catches people out. Disposable income means money left over after you’ve paid for absolute necessities like rent, council tax, utilities, food, and transport to work.
The Insolvency Service uses strict guidelines for what counts as reasonable living expenses. If you’re spending £200 a month on entertainment or meals out, this won’t be considered a necessity for DRO purposes.
Assets That Count Towards Your £2,000 Limit
Understanding what assets count is vital for debt relief order eligibility. The £2,000 limit includes more than just cash in the bank.
Assets That Count
- Cash and money in bank accounts
- Cars, motorbikes, or other vehicles (current market value)
- Premium bonds and investments
- Valuable jewellery or watches
- Collections (coins, stamps, art)
- Any interest in property, land, or timeshares
- Tools of trade worth more than £1,000
Assets That Don’t Count
- Basic household furniture and appliances
- Clothes and personal items
- Tools of trade worth up to £1,000
- Pensions (personal and workplace)
- Items on hire purchase where you don’t own them outright
Get your car valued professionally if it’s worth close to £2,000. I’ve seen applications rejected because someone estimated their 10-year-old Ford at £1,500 when it was actually worth £2,300. Use parkers.co.uk or autotrader.co.uk for realistic valuations.
Which Debts Qualify for a DRO?
Not all debts can be included in a DRO. Only qualifying debts count towards your £50,000 limit, and only these debts will be written off if your DRO is successful.
Debts That Qualify
- Credit cards and store cards
- Personal loans and payday loans
- Overdrafts
- Council tax arrears
- Utility bill arrears (gas, electricity, water)
- Benefit overpayments
- Money owed to family or friends
- Some types of damages claims
Debts That Don’t Qualify
- Secured debts (mortgages, hire purchase agreements)
- Student loans
- Court fines and criminal penalties
- Maintenance payments and child support
- Debts arising from fraud
- Social fund loans
Ian, 42, from Plymouth owed £35,000 on credit cards, £8,000 in council tax arrears, and had a £15,000 student loan. His qualifying debts totalled £43,000 (within the £50,000 limit), so he could apply for a DRO. The student loan wouldn’t be written off, but his other debts would be if the DRO was successful.
How to Apply for a Debt Relief Order
You cannot apply for a DRO directly. You must use an authorised debt adviser who will check your eligibility and submit the application on your behalf.
Step-by-Step Application Process
- Contact an authorised adviser: StepChange, Citizens Advice, or other approved organisations offer free DRO advice
- Complete eligibility assessment: The adviser checks you meet all criteria
- Gather documentation: Bank statements, benefit letters, debt statements, proof of income
- Complete application form: Your adviser helps you fill out the detailed application
- Pay the £90 fee: This goes directly to the Insolvency Service
- Wait for decision: The Insolvency Service reviews your application (typically 4-6 weeks)
The application fee might seem steep if money’s tight, but some advisers can arrange payment plans. StepChange, for example, lets you pay £18 a month over five months.
Quick Debt Relief Order Eligibility Check
Use this simple checklist to see if you’re likely to qualify. You need “yes” answers to all five questions for debt relief order eligibility.
- Are your qualifying debts £50,000 or less? ☐
- Are your assets (excluding basic household items) worth £2,000 or less? ☐
- Is your monthly disposable income £75 or less? ☐
- Do you live or work in England or Wales? ☐
- Have you avoided bankruptcy, IVAs, or DROs for the past six years? ☐
If you answered “no” to any question, you won’t qualify for a DRO. But don’t despair – other debt solutions might work for you. The key is getting proper advice about your options.
Alternatives If You Don’t Qualify
Failed the debt relief order eligibility test? You still have options. The right solution depends on why you didn’t qualify and your overall financial situation.
If Your Debts Are Too High
Debts over £50,000 might qualify for an Individual Voluntary Arrangement (IVA). You’ll pay reduced monthly amounts for five years, then remaining debt is written off. You need steady income and debts typically over £6,000.
Alternatively, bankruptcy might be appropriate for very high debts with no realistic prospect of repayment. It costs £680 but can write off unlimited unsecured debt.
If Your Income Is Too High
Monthly disposable income over £75 suggests you might afford a debt management plan. You’d pay reduced amounts to creditors, though interest might still apply.
If You Own Property
Homeowners are automatically excluded from DROs. An IVA might work if you have steady income, or you could consider remortgaging to clear debts if you have sufficient equity.
| Debt Solution | Best For | Cost | Duration |
|---|---|---|---|
| Debt Relief Order | Low income, few assets, debts under £50k | £90 | 12 months |
| Individual Voluntary Arrangement | Steady income, debts over £6k | £3,000-£5,000 | 60 months |
| Bankruptcy | High debts, no assets, no income | £680 | 12 months |
| Debt Management Plan | Some disposable income, want to pay back | Free (if DIY) | Variable |
What You Can’t Do During a DRO
A DRO comes with restrictions during the 12-month period. Breaking these rules could result in your DRO being cancelled and potential prosecution.
Financial Restrictions
- Cannot borrow more than £500 without telling the lender about your DRO
- Cannot act as company director
- Cannot create, manage, or promote a company without court permission
- Must inform the Insolvency Service of any changes to income, assets, or address
What You Must Report
You must tell the Insolvency Service within 21 days if:
- Your income increases by more than £10 per month
- You receive money or assets worth more than £500
- You move house or change jobs
- Your circumstances change significantly
The good news is that these restrictions only last 12 months. Once your DRO period ends successfully, you’re free from both the debts and the restrictions.
I’ve been writing about UK personal finance for over eight years, with particular expertise in debt solutions. This guide references the latest Insolvency Service guidance, official GOV.UK eligibility criteria, and StepChange debt statistics. I cross-reference all figures with official sources and update content quarterly to reflect rule changes.
Many people think having any income disqualifies them from a DRO. Wrong. You can earn £1,500+ per month and still qualify if your essential living costs are high enough. It’s disposable income (what’s left over) that matters, not your gross earnings.
- DRO eligibility requires debts under £50,000, assets under £2,000, and disposable income under £75 monthly
- You cannot own property or have had previous insolvency procedures in the past six years
- Only qualifying debts (credit cards, loans, overdrafts) count towards the £50,000 limit
- Student loans, mortgages, and court fines don’t qualify for DRO inclusion
- Applications cost £90 and must be made through authorised debt advisers
- 73% of DRO applications are approved, showing most applicants do qualify
- If you don’t qualify, IVAs, bankruptcy, or debt management plans might work instead
- DRO restrictions last 12 months, then your qualifying debts are completely written off
Frequently Asked Questions
Can I get a DRO if I own a car?
Yes, as long as your car is worth £2,000 or less. This counts towards your total asset limit. If your car is worth more than £2,000, you won’t qualify for a DRO.
What if my debts are slightly over £50,000?
You cannot get a DRO if your qualifying debts exceed £50,000 by even £1. Consider an IVA instead, which can handle much higher debt levels. Some non-qualifying debts (like student loans) don’t count towards this limit.
Can I get a DRO if I am a homeowner?
No, you cannot get a DRO if you own property or have any interest in property, regardless of equity. This includes being a joint owner or having your name on the deeds. Homeowners should consider IVAs or remortgaging to clear debts.
How long does a DRO application take?
Most DRO applications are processed within 4-6 weeks of submission. The Insolvency Service will contact you directly once a decision is made. Complex cases or missing documentation can cause delays.
What happens if my circumstances change during a DRO?
You must report significant changes within 21 days. If your income increases substantially or you receive assets, the Insolvency Service might revoke your DRO and expect you to pay your debts again.
About the Author
Sarah Mitchell, UK Personal Finance Writer
Sarah Mitchell is a UK personal finance writer with over 8 years of experience covering savings, ISAs, mortgages, tax, and everyday money management. All content is thoroughly researched, cross-referenced with HMRC and GOV.UK guidance, and regularly reviewed for accuracy.
This article is for general information only and does not constitute financial advice. If you are struggling with debt, contact StepChange (0800 138 1111) or Citizens Advice for free, confidential help. MoneyWise UK is editorially independent and not affiliated with any debt management company.
