Changes to Debt Relief Orders now coming into effect

As per the Chancellor’s Spring Budget, the £90 fee for Debt Relief Orders has now been removed, and from June, the debt limit will rise from £30,000 to £50,000, and the vehicle value limit from £2,000 to £4,000. These updates aim to make DROs more accessible for those in financial distress.

The changes to Debt Relief Orders (DRO) announced in the Chancellor’s Spring budget are now coming into effect. A DRO is a formal debt solution – a legally-binding process with legal rules and restrictions which can help write-off debts and help people make a fresh start. They are suitable for people who have little spare income to pay-off their debts and who have low-value assets.  

Until 6 April, people had to pay a £90 administration fee to enter a DRO. But in his Budget speech in March, Chancellor Jeremy Hunt said that although a Debt Relief Order is the best way to resolve debts for some people, the £90 fee could deter those who need them the most. The fee has therefore now been removed.

Other changes to Debt Relief Orders that will come into force in June include:

  • raising the total amount of debt covered by a DRO from £30,000 to £50,000
  • raising the value of the vehicle a person can own when they enter a DRO from £2,000 to £4,000.

Andrew Shore of the Insolvency Service said: “Some people need a car for work, mobility or family reasons, but the value of vehicles has risen a lot in recent years. Raising the value of the car you can own will enable more people to access a DRO when they need one. And those who owe up to £50,000 but don’t have the money to make repayments to creditors will be able to see a way out of overwhelming debt.”

People struggling with debts may also be able to get support through the government’s free Breathing Space debt respite scheme. The scheme offers a 60-day break from the build-up of interest and other fees and puts a pause on contact and enforcement action by creditors.

If you would like more information about the issues raised in this article or any aspect of debt collection and credit control, please contact a member of our team on 020 8290 7400 or email

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