Debt Relief Order (DRO): What You Need to Know in 2026

Updated for 2026

What is a Debt Relief Order and who can apply?

A debt relief order (DRO) is a form of insolvency designed for people on low incomes who owe relatively small amounts and have few assets. If you’re struggling with debts you can’t repay, a DRO could write them off entirely after a 12-month moratorium period, giving you a genuine fresh start.

DROs are administered by the Insolvency Service and can only be applied for through an approved intermediary, usually a debt adviser at a charity such as Citizens Advice or StepChange.

DRO eligibility criteria in 2026

Following significant changes introduced by the government in 2024, the eligibility rules for a debt relief order are now more accessible than ever:

• Your total qualifying debts must be no more than £50,000
• Your disposable income (after essential living costs) must be no more than £75 per month
• Your total assets must not exceed £2,000 (excluding a motor vehicle worth up to £4,000)
• You must not be a homeowner
• You must not already be subject to another insolvency procedure

The debt threshold was raised from £30,000 to £50,000 in June 2024, and the vehicle allowance doubled from £2,000 to £4,000, meaning far more people now qualify.

The DRO fee has been abolished

One of the biggest changes: since April 2024, the £90 application fee for a debt relief order has been completely removed. Applying for a DRO is now free, which removes a significant barrier that previously stopped many people from accessing this form of debt relief.

How does a DRO work?

Once a DRO is granted, you get a 12-month moratorium. During this time, creditors listed in your DRO cannot chase you for payment or take enforcement action. At the end of the 12 months, provided your circumstances haven’t significantly changed, the debts included in the order are written off completely.

During the moratorium you must not take on additional credit of £500 or more without disclosing your DRO to the lender.

DRO vs bankruptcy: which is right for you?

If your debts exceed £50,000 or you have assets above the DRO thresholds, bankruptcy may be the more appropriate route. The current fee to apply for bankruptcy is £680, and unlike a DRO, bankruptcy can include people who own property (though the property may need to be dealt with as part of the process).

For debts under £50,000 with limited income and assets, a debt relief order is usually the simpler and now entirely free option. You can read more about how bankruptcies work on our site.

Other options to consider

A DRO isn’t the only debt solution available. Depending on your situation, you might also want to look into:

• Breathing Space: a 60-day legal protection from creditor action while you get advice
• Council tax debt rights: know your rights before bailiffs get involved
• Individual Voluntary Arrangements (IVAs): a formal agreement to repay part of your debts over five or six years
• Debt Management Plans (DMPs): an informal arrangement to repay debts at a reduced rate

How to apply for a DRO

You cannot apply for a debt relief order yourself. You need to go through an approved intermediary, which is typically a free debt advice service. Contact one of the following to get started:

• Citizens Advice
• StepChange Debt Charity
• National Debtline: 0808 808 4000

This article is for general information only and does not constitute financial advice. If you are struggling with debt, please seek guidance from a qualified debt adviser.