If you’re struggling to keep up with your rent payments, you’re not alone Many people face financial difficulties that make it challenging to pay their rent on time In some cases, these rent arrears can lead to more serious consequences, such as the threat of eviction If you find yourself in this situation, a Debt Relief Order (DRO) may be able to help.
What is a DRO?
A Debt Relief Order is a form of bankruptcy relief available to people who have relatively low levels of debt and minimal assets It is a formal insolvency procedure that allows individuals to write off their debts after a period of time, usually 12 months During this time, creditors are not allowed to pursue you for the money you owe them, and at the end of the 12 months, your debts are typically discharged.
How can a DRO help with rent arrears?
If you’re struggling to pay your rent and facing arrears, a DRO can provide much-needed relief By including your rent arrears in the DRO, you can stop your landlord from pursuing you for the money you owe This can give you some breathing room to get your finances in order and work towards a more sustainable solution for your housing situation.
However, it’s important to note that not all types of debt are included in a DRO For example, secured debts, such as mortgages or car loans, cannot be included Additionally, certain obligations, such as court fines or child support payments, are also exempt from a DRO Therefore, it’s essential to carefully consider whether a DRO is the right solution for your specific financial circumstances.
How to apply for a DRO
Applying for a DRO is a relatively straightforward process, but it’s important to meet certain criteria to be eligible To qualify for a DRO, you must have debts of £30,000 or less, assets worth less than £2,000, and a monthly surplus income of £75 or less dro rent arrears. You must also have lived or carried on business in England or Wales in the last three years and not have been subject to another insolvency procedure in the last six years.
To apply for a DRO, you will need to contact an approved debt advisor who can help you assess your eligibility and guide you through the application process The advisor will need to verify your financial situation and complete the necessary paperwork on your behalf Once your application is submitted, it will be reviewed by the Insolvency Service, and if approved, your DRO will be granted.
After a DRO is granted
Once your DRO is in place, you will be subject to certain restrictions for the duration of the 12-month period You will not be able to obtain credit of £500 or more without informing the lender of your DRO status, nor will you be able to act as a company director during this time Additionally, your DRO will be recorded on a public register, which may affect your credit rating.
However, once the 12 months have passed, your debts will typically be discharged, and you will be free from the burden of your rent arrears and other included debts It’s important to be aware that not all debts are automatically included in the DRO, so it’s crucial to carefully review the terms and conditions of your arrangement to ensure that all relevant debts are accounted for.
Seeking alternative solutions
While a DRO can provide much-needed relief for those struggling with rent arrears and other debts, it’s not the only option available Before proceeding with a DRO, it’s advisable to explore other potential solutions, such as negotiating a repayment plan with your landlord or seeking financial assistance from local charities or government programs.
Additionally, if your financial situation has changed significantly due to unforeseen circumstances, such as job loss or illness, you may be eligible for other forms of support, such as Housing Benefit or Universal Credit These benefits can help alleviate the financial strain of paying rent and prevent arrears from accumulating.
In conclusion, if you are struggling to keep up with your rent payments and facing arrears, a Debt Relief Order may be able to provide the relief you need By including your rent arrears in a DRO, you can stop your landlord from pursuing you for the money you owe and work towards a more sustainable solution for your housing situation However, it’s important to carefully consider all of your options and seek advice from a qualified debt advisor before proceeding with a DRO to ensure that it is the best course of action for your specific financial circumstances.