A Debt Relief Order (DRO) is a type of insolvency. A DRO has a duration of 12 months and after approval it will write off all unsecured debt giving you a complete fresh start. To Qualify for a DRO you must have unsecured debts of £20,000 or less and a disposable income of £50 or less.

A Debt Management Plan is a debt solution with a repayment schedule that fits in with your income and expenditure. A single reduced payment will allow you to manage your finances better and pay back what you can afford every month.

Bankruptcy is a formal court procedure which you can start yourself if you can’t pay back your debts, as well as applying for bankruptcy yourself, someone else you owe money to (a creditor) can ask a court to make you bankrupt, even if you don’t want them to. They can only do this if you owe at least £5000 or more. Your assets (with certain exceptions) are sold to help pay your creditors. However, you can usually keep your personal belongings, the contents of your home and your tools of trade (which may include your car) unless they have a high value. If you have surplus income after meeting your essential household and personal expenses, you will have to make payments out of your income for up to 3 years. Your assets and income are dealt with by a licensed and regulated insolvency practitioner or by a government official called the official receiver. Bankruptcy usually lasts for 1 year, and once you have been freed (discharged) from your bankruptcy, you are released from your debts (with certain exceptions).