How Many Debt Relief Orders Can I Have? Quick Answer & FAQs
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How many Debt Relief Orders can I have? We recently received this question from one of our readers and wanted to clear things up.
Read on to learn how many Debt Relief Orders you can have and what the implications are. Debt Relief Orders can be a great way to get out of debt, so what are the details?
What Is a Debt Relief Order?
A Debt Relief Order is one type of debt solution. Some people in debt who are unable to pay off the minimum payments can use a Debt Relief Order to block creditors and eventually clear any obligation to pay.
A Debt Relief Order is not the only option and it might not be the best path to go down.
How Does a Debt Relief Order Work?
If the debtor is successful in applying for the Debt Relief Order, it will become active immediately. From this point, no creditor or debt collection agency is allowed to call, text or write letters to the debtor for a full year.
You will not be asked to pay any money within these 12 months and should never be contacted by your creditors.
At the end of the year, if your personal finances have not improved you can have all your debts written off. However, if during the 12 months your finances improved because you got a pay rise, a new job or received an inheritance, you need to tell the Official Receiver.
Do Debt Relief Orders Cover More than One Debt?
Yes, your Debt Relief Order will be used to cover all the debts you have at that time. You do not need a Debt Relief Order for each debt.
Who Qualifies for a Debt Relief Order?
Debt Relief Orders are not available to everyone. If you own your own home you cannot use a Debt Relief Order to get out of debt. Instead, you could benefit from a Debt Management Plan or an Individual Voluntary Arrangement.
There are more conditions to be suitable for a Debt Relief Order. You must also have £75 or less to spend at the end of each month after your essential costs. For example, after you have paid:
- Your rent
- Your grocery bills
- Utility bills
- Transport costs
- Child support
You must only have £75 or less left each month. This is why a Debt Relief Order is aimed at people who are in debt without a job or are in debt and on a low income.
There is one final criterion you must meet to get a Debt Relief Order. The total amount of debt you have must not exceed £30,000. If you have more debt than this and cannot pay, you may want to consider bankruptcy or another debt solution.
What You Need to Do After Getting a DRO Accepted
If you have had your Debt Relief Order application accepted, the details of the DRO will be lodged on the Individual Insolvency Register. The details remain on this register for 15 months typically (from acceptance to the 12-month period ends and then 3 additional months).
It is important that you download any reference to your DRO on this register to inform creditors that they cannot contact you or to tell them your debts have been wiped.
How Many Debt Relief Orders Can I Have?
There is no limit to the number of Debt Relief Orders you can have. However, it is not that straightforward.
Once you have had a Debt Relief Order, you will not be able to apply for another one for the next six years. Technically, you can have as many Debt Relief Orders as you need (although you probably won’t get them all accepted), but you can only have one Debt Relief Order within a six-year period.
My Debt Relief Order Was Cancelled, Can I Get Another?
Some people have a Debt Relief Order accepted but then it gets cancelled because their finances improve and they don’t need it any more.
Even in this situation, you will not be able to get another Debt Relief Order within six years of getting the previous one accepted.
However, the fact that your finances improved and you didn’t wipe your debt through the Debt Relief Order could help you to secure another one in the future.
Is It Hard to Get Two Debt Relief Orders?
It can be difficult to get two or more Debt Relief Orders. But the difficulty is not in the application or getting them accepted. The problem is that you are not likely to get more credit, and therefore more debt, if you already had all your debts wiped in your first Debt Relief Orders.
After having a Debt Relief Orders, it stays on your credit file for six years. Every time you apply for another loan, credit card or other credit, the lender you apply to will see that you have a Debt Relief Order and is less likely to lend to you.
If they are less likely to give you credit, there is not much chance of getting in debt again. And thus, you wouldn’t have any need for a second Debt Relief Order.
How Many Debt Relief Orders Can I Have? (Quick Recap!)
You can have more than one Debt Relief Order in your lifetime, but it is usually difficult to get more than one because you are unlikely to receive credit after the first one.
But if you do find yourself in a situation where you need another Debt Relief Order, it is possible. You can apply for another Debt Relief Order if your last Debt Relief Order was granted over six years ago.
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