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Charity welcomes proposed improvements to Debt Relief Orders

​12 January 2021

The Money Advice Trust, the charity that runs National Debtline, has welcomed the Government’s proposed changes to the financial eligibility criteria for Debt Relief Orders, which will give more people in problem debt access to this debt solution.

The Insolvency Service’s proposed changes to Debt Relief Orders include:
  • increasing the total amount of debt allowable to £30,000 (from £20,000)
  • increasing the value of assets owned by the individual to £2,000 (from £1,000)
  • increasing the level of surplus income to £100 (from £50) per month
In its briefing published in October, Debt Options in the new normal the Money Advice Trust made the case for several of these changes as part of a wide-ranging review of the personal insolvency and debt options available to households in financial difficulty.
 
Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:


“We welcome these proposed improvements to Debt Relief Orders – and we are pleased the Insolvency Service is listening on the need to adapt the debt options landscape to Covid-19. 

“For many people currently not eligible, DROs could provide an important alternative to the costly and challenging bankruptcy route. In addition to widening eligibility, the government should also consider temporarily waiving the £90 fee to apply, which presents a barrier for the growing number of people for whom a DRO is the best option.

“Beyond these changes, we need a full review of all debt options in the wake of Covid-19 – as well as a clear timetable for the implementation of the government’s forthcoming Statutory Debt Repayment Plans, which will play an important role in supporting households to recover from the impact of Covid-19.”
 

 
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