Following an announcement in the Budget, the government scrapped the £90 fee to apply for a DRO in England and Wales on 6 April.
The number taken out that month was then 63% higher than the monthly average over the last 10 years.
Debt charity Citizens Advice said that nine in 10 of the people they helped apply for a DRO had struggled to cover the £90 fee, with many being priced out of insolvency.
There are specific rules regarding DROs, which mean:
It is for those whose debts do not exceed £30,000, although this will rise to £50,000 from 28 June
Applicants have to work with a debt organisation and have no more than £75 left each month once essential costs have been paid
Those applying for DROs can own a car up to the value of £2,000, but this will rise to £4,000 from 28 June
If an application is accepted, some debts will be frozen for one year, then written off
In Northern Ireland, DROs still cost £90 and have tighter qualifying criteria, but the Northern Ireland government say similar changes “are currently being considered”
In Scotland, the equivalent scheme is a Minimal Asset Process, and the fee was scrapped in 2020
In 2023, some 31,717 DROs were granted in England and Wales – more than during any year for five years.
After the plan to scrap the fee in England and Wales was announced, charities called for greater resources to help deal with a predicted rise in demand.
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