IVA Impact on Credit Score
Concerned about your credit rating after entering an IVA? This guide explains what to expect and how to take control of your financial future.
April 8, 2025
Debt Relief Order
A Debt Relief Order (DRO) can be a lifeline if you’re struggling with debt. At Advice Centre Group, we’re here to help you understand if this solution could be right for you.
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What is a Debt Relief Order?
A Debt Relief Order is a formal debt solution for individuals with low income, minimal assets, and relatively low debt levels. It provides a legal way to deal with unmanageable debts when you can’t afford to make payments.
With a DRO:
- You won’t have to make payments toward most debts included in the order
- Creditors cannot force you to pay off these debts during the DRO period
- Most qualifying debts are written off after the DRO ends (typically after 12 months)
- You’ll work with a specialist DRO adviser who will help with your application
- The application process is handled by an official receiver
A DRO offers a fresh financial start with less cost and complexity without many of bankruptcy’s drawbacks.
Is a Debt Relief Order Right for You?
You can qualify for a Debt Relief Order if all of the following criteria apply:
- Your qualifying debt should be less than £50,000
- You have £75 or less left each month after paying household expenses
- Your total assets are worth no more than £2,000
- If you own a vehicle, it must be worth less than £4,000
- You don’t own a house.
- You haven’t had a DRO in the last six years.
- You’re not already in another debt plan like bankruptcy or an IVA.
Debts That Can Be Included In a Debt Relief Order:
- Credit cards and overdrafts
- Personal loans
- Rent, utility, and council tax arrears
- Telephone bills
- Income tax and benefits overpayments
- Hire purchase agreements
- Buy now – pay later agreements
- Bills for services (vets, solicitors, etc.)
- Personal debts (friends and family)
- Business debts
Debts That Can Be Included In Debt Relief Order:
- Magistrates court fines and confiscation orders
- Child support and maintenance
- Student loans
- Social fund loans
- Compensation for death and injury
- Debts obtained through fraud
Pros and Cons of a Debt Relief Order
Advantages
- Most qualifying debts are written off after 12 months
- You don’t make payments toward included debts during the DRO period
- Creditors can’t pursue you for payment once the DRO is made
- Much less expensive than bankruptcy
- No court appearances are required
- Straightforward application process with adviser help
- Provides a clean slate after completion
- Most debts can be included, including rent arrears, fuel debt and Council Tax
- It’s a formal, legally binding agreement
Disadvantages
- Stays on your credit file for 6 years
- Restrictions on company directorship and business activities
- Your details appear on the Individual Insolvency Register
- Strict asset limits – homeowners with equity won’t qualify
- Secured creditors can still take action against you
- Some debts remain (court fines, student loans, maintenance payments)
- May affect current or future tenancy agreements
- Your credit rating will be affected
- We have helped over 11,300+ people in managing their debt and guiding them toward financial wellbeing
- We focus on finding the right solution for your situation
- We provide personalised service tailored to your specific needs
- Our team handles all professional creditor negotiations
- You’ll receive comprehensive support throughout your journey
Hear From Thomas
Life Changers
The advice centre helped me was I was on my last hope of anything… all staff were friendly understanding and couldn’t do enough to help me with my situation
Everything was done was sorted so quickly and easily…just two calls and my worries were over. I would definitely recommend them to anyone that’s in a difficult position
Now I live my life happy and worry free
Name changed for Privacy.
Take the first step toward financial peace of mind today
By submitting the above contact form you agree to be contacted by The Advice Centre regarding your enquiry. Your data will not be passed onto third parties without your consent.
Learn more about managing your debt:
Debt Relief Order
A Debt Relief Order is a formal debt solution for individuals with low income, minimal assets, and relatively low debt levels.
February 24, 2025
Debt Management Plan – (DMP)
A Debt Management Plan is an informal arrangement between you and your creditors to repay your debts at a rate you can afford.
February 21, 2025
Call us – 0161 768 8403
Email us – Enquiries@advicecentregroup.co.uk
You can visit the Money Helper website to find out more about managing your money and to get free advice, they are an independent service set up to help people manage their money
Advice Centre Group Ltd registered in England and Wales (14322979). Registered office: Second Floor A, Cheadle Place, Cheadle, Cheshire, England, SK8 2JX.
Adam Southard is authorised as a Licensed Insolvency Practitioner in the United Kingdom by the Insolvency Practitioners Association, We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meet the criteria for one of our insolvency solutions, therefore, all advice regarding Individual Voluntary Arrangements (IVA) is given in reasonable contemplation of an insolvency appointment.
Adam Southard is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Office Holder No. 11930
Insolvency Practitioner Directory- Insolvency Practitioner Details (bis.gov.uk)
What you need to know about Individual Voluntary Arrangements
(Insolvency Service)
We provide solutions to individuals throughout the UK, We Will help recommend solutions available to your circumstances in which you can then make an informed decision about which solution you qualify for is best for you and your circumstances.