“Debt is the worst poverty” ~Thomas Fuller This is a guest Article from Stacey Cavanagh
In the midst of the current economic climate, debt advice companies have been inundated with calls for advice from families and individuals who are struggling to meet their financial commitments and who are struggling with excessive debt.
As debt, in the twenty-first century, is simply a fact of life for many, there are now a number of potential solutions available to those in this situation. One of those is a debt relief order.
Essentially, a debt relief order is designed to assist those with very little disposable income, no assets of value and excessive debts. It lasts for a 12 month period and during that time, your creditors will not be permitted to chase up payments from you. You will not be expected to make any repayments on eligible debts. If your financial circumstances improve during the course of that period, you will be expected to make arrangements to repay the debts. If they do not, then at the end of that period the debts are written off. There are, of course, strict eligibility criteria ensuring that the debt relief order is reserved only for those in need. Such criteria include that the debts must not exceed £15000 and the gross assets must not amount to any more than £300 in value. In addition to that, the debtor must not have any more than £50 disposable income available in a month. This is calculated by taking your income and deducting all household expenses and necessary living costs, such as food, utility bills and rent.It is estimated that around 11% of those who declare personal bankruptcy would have been eligible for a debt relief order. The DRO is designed as an alternative to bankruptcy for those in levels of debt that they simply cannot repay.
This is a guest post written by Stacey Cavanag.
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