3.7 million people in debt unaware of Debt Relief Orders
Changes to DROs coming in on 28 June will open option up to more people on low incomes.
Posted June 27, 2024
- Changes to DROs coming in on 28 June will open option up to more people on low incomes
- But National Debtline reveals 3.7 million people in debt are not aware that the option for a Debt Relief Order exists
- 28 June changes follow removal of £90 registration fee in April
Further changes to the eligibility criteria for Debt Relief Orders, from Friday 28thJune, have the potential to lift many more people out of debt.
Yet, research from National Debtline, shows an estimated 3.7 million UK adults in debt (31 percent) have never heard of a Debt Relief Order and the help it can provide people on low incomes, with unmanageable arrears.
Since the £90 fee for a DRO was removed in April, registrations for the debt option have hit record levels.
But findings from National Debtline show millions more people who could benefit from accessing a DRO know nothing about it.
The charity’s findings, based on a UK-wide Opinium poll of 2,000 adults, also reveal public awareness of the debt option is lacking, despite the difference it can make for people in financial difficulty - an estimated 25 million people in the UK (47 percent) are not aware of DROs.
Awareness of the debt option is far lower than compared with bankruptcy – 90 percent of UK adults (48.3 million) are aware of bankruptcy as an option.
With figures released earlier this year from the Money and Pensions Service showing 8 million people in the UK needing debt advice, the charity is urging anyone struggling with their bills to seek debt advice.
Changes to DRO’s which come into effect from 28 June include:
- Increasing the minimum debt value threshold from £30,000 to £50,000.
- Increasing the maximum value of a motor vehicle that someone can retain from £2,000 to £4,000.
There are strict eligibility rules which have to be met to qualify for a DRO. A DRO is for personal debts of up to £50,000 from 28 June and if eligible, can stop most creditors from taking further action against you for 12 months, writing off debts included in the DRO after this period.
National Debtline provides free, independent debt advice over the phone and online, and is also able to register people who are eligible for a Debt Relief Order where this is the best option for them.
The charity has further information about Debt Relief Orders at: www.nationaldebtline.org/debt-relief-orders
Steve Vaid, chief executive of the Money Advice Trust, the charity that runs National Debtline, said:
“Too many people in financial difficulty, who may benefit from a Debt Relief Order, are unaware of their existence and the difference this option could make to their situation.
“Facing bills and demands can be a stressful and lonely place and it’s vital people get the support they need to deal with their debts. A Debt Relief Order offers a safe route out of debt for people on low incomes who are in unmanageable debt.
“Changes that come into effect on 28 June mean more people will be eligible to access this debt option.
“Not everyone will be eligible, but seeking free, impartial debt advice is a crucial first step. Whatever someone’s circumstances our advisers at National Debtline can help.”
National Debtline provides free, independent, expert advice. Contact National Debtline for free on 0808 808 4000 or via www.nationaldebtline.org.
