Debt Relief Orders (DROs) are a useful tool for individuals struggling with debt to get their finances back on track If you are behind on your rent payments, you may be wondering how a DRO can help you address your rent arrears In this article, we will explore everything you need to know about DRO rent arrears and how you can use this debt solution to alleviate your financial burdens.
What is a DRO?
A Debt Relief Order (DRO) is a formal insolvency procedure that can help individuals who are struggling with debt and have little to no income or assets to repay their creditors It allows you to have your debts written off after a 12-month period, provided that you meet certain criteria A DRO is designed for individuals with relatively low levels of debt and cannot afford to repay what they owe.
Can DRO Help with Rent Arrears?
If you are struggling to pay your rent and have accrued rent arrears, a DRO can help you manage this debt along with other unsecured debts Rent arrears are considered as unsecured debts, which means that they can be included in a DRO application By obtaining a DRO, you can have your rent arrears written off after the 12-month moratorium period, allowing you to start fresh and focus on maintaining your current rent payments.
How to Include Rent Arrears in a DRO?
To include your rent arrears in a DRO, you will need to meet the eligibility criteria for this debt solution You must have debts totaling less than £30,000, assets worth less than £2,000, and disposable income of £75 per month or less Rent arrears are classified as non-priority debts, which means that they can be included in a DRO as long as they meet the overall debt limit.
When you apply for a DRO, you will need to list all of your unsecured debts, including your rent arrears, on the application form Your appointed Debt Advisor will assess your financial situation and determine whether a DRO is the right solution for you If your application is approved, your rent arrears will be frozen for the duration of the DRO, and you will no longer be pursued by your landlord for the outstanding rent payments.
Benefits of Using DRO for Rent Arrears
There are several benefits to using a DRO to address your rent arrears dro rent arrears. Firstly, it provides you with legal protection from your creditors, including your landlord Once the DRO is in place, your creditors are not allowed to take any further action against you to recover the debt, including evicting you for non-payment of rent.
Secondly, a DRO allows you to write off your rent arrears and other unsecured debts after the 12-month period This provides you with a fresh start and relieves the financial burden of outstanding rent payments You can then focus on managing your current rent payments and rebuilding your credit score.
Lastly, a DRO is a cost-effective debt solution for individuals who are struggling financially The application fee for a DRO is £90, which is significantly lower than other debt solutions such as bankruptcy This makes it accessible for individuals with low levels of debt and little to no disposable income.
Conclusion
If you are struggling to pay your rent and have accumulated rent arrears, a Debt Relief Order (DRO) can help you address this debt and get your finances back on track Rent arrears are considered as unsecured debts and can be included in a DRO application, provided that you meet the eligibility criteria By obtaining a DRO, you can have your rent arrears written off after the 12-month moratorium period, giving you a fresh start and peace of mind If you are considering a DRO to address your rent arrears, seek advice from a Debt Advisor to explore your options and determine the best course of action for your financial situation.