DRO Surge: The Quiet Reset That’s Reshaping UK Debt Recovery

Debt Relief Orders (DROs) – What You Need to Know

A Debt Relief Order (DRO) is a formal insolvency solution for individuals with low income, minimal assets, and unsecured debts under £50,000. It provides legal protection from creditors for 12 months, after which qualifying debts are written off if the debtor’s financial situation hasn’t improved.

Why It Matters

While DROs are rarely encountered in our current debt recovery operations, recent data shows a record number filed in August 2025, making it essential to understand their impact on collections.

Key Implications for Recovery

Once a DRO is approved, there is a 12-month moratorium: ➤ No contact with the debtor ➤ No recovery action permitted ➤ No interest or charges can be added

DROs apply only to individuals, not companies.

After 12 months, if the debtor’s situation remains unchanged, all qualifying debts are legally written off—this can significantly affect your client’s recovery prospects.

What You Can Do

Check the Insolvency Register as part of your pre-legal checks.

Advise your client promptly if a DRO is active or pending.

Engage early with debtors to offer reasonable payment plans—this may prevent them from seeking a DRO and helps secure recovery for your client.

Be aware: once a DRO is approved, it is legally binding and all collection activity must cease.

A record number of people turned to debt relief orders (DROs) in August to ease their financial struggles, Insolvency Service figures show. In total, the number of people going financially insolvent across England and Wales jumped by 16% in August compared with the same month a year earlier, according to Insolvency Service figures.

https://uk.news.yahoo.com/number-people-declared-insolvent-hits-093730161.html?guccounter=1&guce_referrer=aHR0cHM6Ly9jb3BpbG90Lm1pY3Jvc29mdC5jb20v&guce_referrer_sig=AQAAABBtOZ52RH4fQ7Yzd8kTFyGJbvzNigSdwdzSMTvNc4fsdQ-zbS3FXs_Gxvuikjje7E-Jo1nCQfXOE9UlSIBBPUsOPctgpu8dzoH368ent6C-u00O4g8JR2zp3FfH4JPOUEk2MUibkBRal1nbSaEvaAjdHWdq4uEqbDlJogjsMKei