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DRO debt threshold could rise to £30,000 under wider reforms

The Insolvency Service has proposed changes to the financial eligibility criteria for debt relief orders (DROs), which should give more people in problem debt access to this debt solution.  

The proposed changes include:

  • increasing the total amount of debt allowable to £30,000 (from £20,000);
  • increasing the value of assets owned by the individual to £2,000 (from £1,000);
  • increasing the level of surplus income to £100 (from £50) per month.

Joanna Elson CBE, chief executive of the Money Advice Trust, said: “We welcome these proposed improvements to DROs – and we are pleased the Insolvency Service is listening on the need to adapt the debt options landscape to Covid-19. Beyond these changes, we ned a full review of all debt options in the wake of Covid-19.”


Deborah Ware, chief operating officer of debt advice provider Financial Wellness Group, said: “The changes to the DRO rules proposed in this consultation will help more people with serious problem debt get a fresh start.


“However, we regularly complete applications for customers but are unable to submit them because the customers don’t have £90 to pay the Insolvency Service fee.


“To ensure people who need a DRO are able to access one we’d also like to see the application fee reduced or waived.”


The consultation closes 25 February 2021.

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