Last updated: 9 May 2026 | Reviewed against official UK guidance where available | Budgeting and Money Tips
GOV.UK says DRO eligibility in England and Wales includes owing less than £50,000, savings/valuable items under £2,000, a vehicle worth less than £4,000, not enough money left to repay debts, and no DRO in the last 6 years. You must apply through an approved debt adviser.
Check whether you meet the eligibility criteria for a Debt Relief Order in 2026.
If you cannot repay debts, a Debt Relief Order (DRO) may be one formal option in England and Wales. Eligibility rules are strict, so check with an approved debt adviser before making decisions.
GOV.UK lists the current DRO criteria, including debt level, assets, vehicle value, spare income and previous insolvency history. Scotland and Northern Ireland have different debt solutions.
What Is a Debt Relief Order?
A Debt Relief Order is a formal debt solution for people in England and Wales who cannot pay qualifying debts and meet strict eligibility rules. GOV.UK says a DRO normally lasts 12 months.
If approved, you stop making payments towards debts listed in the DRO during that period. After 12 months, you usually do not have to pay those debts, but restrictions and credit-file effects apply.
Debt Relief Order Eligibility Criteria for 2026
GOV.UK says an approved debt adviser checks whether you meet the DRO rules. Current criteria include owing less than £50,000 in total, savings or valuable items worth less than £2,000, a vehicle worth less than £4,000, and not having enough money left at the end of the month to repay debts.
You must also have lived or worked in England and Wales in the last 3 years, not be currently bankrupt or in an IVA, and not have had a DRO in the last 6 years. Scotland and Northern Ireland have different debt options.
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
Someone considering a Debt Relief Order should speak to an approved debt adviser. The adviser checks debts, income, assets, vehicle value, housing position and whether another debt solution would be safer.
How to Apply for a Debt Relief Order
You cannot apply for a DRO on your own. GOV.UK says you must contact an approved debt adviser, who checks eligibility and helps with the application.
Do not pay for unnecessary debt help before checking free approved debt advice routes.
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
If a DRO is not suitable, a free debt adviser can explain alternatives such as a debt management plan, breathing space, bankruptcy, an IVA or informal repayment arrangements. The right option depends on income, assets, debts, home ownership and risk.
Do not choose a paid debt solution before checking free debt advice.
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.
MoneyWise UK reviews publicly available UK guidance and trusted sources when producing finance explainers. This guide is general information only, not personalised financial advice. Rules, rates and provider terms may change, so check the linked official sources before acting.
Many people think having any income disqualifies them from a DRO. Wrong. Income does not automatically disqualify you. An approved debt adviser checks what is left after essential living costs and whether a DRO is suitable.
- DRO eligibility depends on the current GOV.UK rules for debt level, assets, vehicle value and whether you have enough money left to repay debts
- 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 must be made through an approved debt adviser, who checks the current GOV.UK rules before applying
- DRO eligibility must be checked before applying, showing most applicants do qualify
- If you don’t qualify, IVAs, bankruptcy, or debt management plans might work instead
- DRO restrictions normally last 12 months; GOV.UK explains when qualifying debts are written off and when a DRO can be cancelled
Rules, rates and provider terms may change. Check official sources before making financial decisions.
Before you act: debt checks
Use this section as a final check before applying, claiming, switching, transferring money or relying on a figure. Rules, rates and provider terms can change, so verify the current position with the linked official sources.
| Decision point | What to check | Source to verify |
|---|---|---|
| Priority debts | Check rent, council tax, energy, court fines and other priority debts before focusing on unsecured borrowing. | GOV.UK: options for dealing with debts MoneyHelper |
| Formal solutions | DROs, bankruptcy and IVAs have strict criteria and long credit-file consequences. | GOV.UK: Debt Relief Orders GOV.UK |
| Advice route | Use free debt advice before choosing a paid debt solution or stopping payments. | MoneyHelper: dealing with debt GOV.UK / MoneyHelper |
- Can You Write Off Debt in the UK? Every Option Explained (2026)
- Debt Snowball Calculator UK: See Your Debt-Free Date in Minutes (2026)
- How Long Does a CCJ Last? Your Complete UK Guide for 2026
- Statute Barred Debt UK: When Your Old Debts Are Legally Unenforceable (2026)
- What Happens After a Debt Relief Order? Your 12-Month DRO Timeline (2026)
Frequently Asked Questions
Who can apply for a Debt Relief Order?
GOV.UK says you must apply through an approved debt adviser and meet eligibility rules for debts, assets, vehicle value, spare income, location and previous insolvency history.
Does a DRO last 12 months?
GOV.UK says a DRO normally lasts 12 months, but it can be cancelled if circumstances change and restrictions apply during the DRO period.
Will a DRO affect my credit file?
GOV.UK says a DRO stays on your credit reference file for 6 years from the date it was approved.
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.
