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More help for people in problem debt from today

Joanna Faith
Written By:
Joanna Faith

Thousands more people will be able to get out of problem debt as a result of changes coming into force today.

Debt Relief Orders (DROs) can now be used if you owe a maximum of £30,000, up from the previous limit of £20,000.

DROs are aimed at people with relatively low levels of unmanageable debt who have nothing to offer their creditors, such as assets or disposable income, and for whom bankruptcy would be a disproportionate response.

The order freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period, then all of the debts included will be written off.

Other changes coming in from today mean you can use a DPO if you have £75 left over at the end of the month after bills and expenses, up from £50, and if your car is valued at £2,000, up from £1,000.

It is expected that over 13,000 more people may use DROs in the next 12 months compared to 2019, an increase of nearly 50 per cent.

Minister for Corporate Responsibility Lord Callanan said: “Debt Relief Orders help those with problem debt get to grips with their finances, these changes will enable more people experiencing problem debt to get a fresh start.”