Could this quick solution make you debt-free in a year?

Are you struggling with your unsecured debts? If you don't have a plan deal with them, there may be a way to sort out your financial situation that you haven't heard of before. A Debt Relief Order is a way to tackle debts and provides a cheaper alternative to bankruptcy.

A fairytale Christmas like this one at Chatsworth House is out of the question for many in Yorkshire

A Debt Relief Order, or DRO, is a formal debt solution designed to help people who are struggling the most with their debts and have a low number of assets.

To qualify for a DRO, you can’t have debts of more than £20,000 and you can’t have more than £50 to put towards your debts each month. Your assets must be worth less than £1,000 in total. Your car is looked at separately, and also can’t be worth more than £1,000.

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A DRO lasts for a year, just like bankruptcy. However, there’s a massive difference in the cost, as it only costs £90 to apply for a DRO, whereas it costs £680 to apply for bankruptcy.

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If your application for a DRO is accepted, the payments on your unsecured debts are completely suspended – you don’t have to pay anything towards them at all, because you’ve shown that you can’t afford to. If your circumstances haven’t changed by the time your DRO finishes, then your debts are completely written off, if your circumstances improve, you may be subject to full bankruptcy.

One of the downsides of DROs is that it will have a negative effect on your credit history for six years from the date that you start it. Companies that lend money and provide certain services, like letting agencies or mobile phone companies, will check your credit history to see how successful you’ve been in repaying debts in the past.

If they can see that you’ve had trouble repaying debts and have started a debt solution, they may be less likely to offer you a service, or only lend to you at a higher rate of interest.

A Debt Relief Order is a type of debt solution – plans that help you get your debts under control, and make them more manageable. There are a number of different solutions available: some reduce your payments each month, some provide debt write-off when they finish. They all work differently and have their pros and cons. Which one suits you just depends on your particular circumstances.

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To apply for a DRO you have to go through an Approved Intermediary – this just means a company that is approved to advise, recommend and apply for a DRO for you – you can’t apply for one by yourself.

If your financial situation is starting to get on top of you, make sure you reach out for help. No one should have to live with the constant worry of unmanageable debt, and there is lots of help available. Speak to a trained debt advisor who will advise you on whether a DRO is right for you and, if it is, they can help you make an application.

Debt Advisory Centre: 0161 871 4881