Do You Qualify to Write Off Your Debts Without Going Bankrupt?

For any individual who is suffering financial hardship during the current recession and is on a low income now have the choice of being able to apply to clear and write off some or all of your unsecured debts such as unsecured loans and credit cards, benefit over payments, hire purchase agreements or buy now pay later agreements as well as arrears on household and utility bills etc without the need to apply for bankruptcy. This process is called a Debt Relief Order and is cheaper for than applying to going bankrupt. A Debt Relief Order is only available to individuals owing debts of less than £15,000, have little assets and are on a low income.
If you qualify for a Debt Relief Order you need to apply to the Official Receiver which can be done on line through an approved third party and you will also need to pay a fee of £90 which can be made by instalments over six months through a payzone outlet. Once your application has been approved and the fee received, as long ass you meet all the qualifying criteria, you should be granted with a Debt Relief Order. At this point, you no longer need to make any further payments to your creditors and your creditors cannot take any action against you. A Debt Relief Order normally lasts for a period of 12 months. At the end of this period (which is normally 12 months) all your debts included in the Debt Relief Application and Order will be written off. Any other debts you owe that were not included still remain payable.
You can qualify for this order if you have debts under £15,000, have spare available income of £50 or less after paying all your household bills, you have no assets more than the value of £300 or own a vehicle of more than £1,000 and must have lived, had a property or business in England or Wales. Your assets include savings, shares, vehicles, antiques or property (this includes your home even if it is mortgaged). If you have not retired but have a pension fund this counts towards your assets. When working out your spare available income you must include your salary or wages, welfare benefits, any payments from any other household members and rental income.
If you are currently bankrupt or made a petition to go bankrupt (unless the Judge has ordered you to make a Debt Relief Order) or you have made or making an individual voluntary arrangement, got a bankruptcy restrictions order or undertaking, had a debt relief order in the last six years or have a debt relief order restriction or undertaking you will be unable to apply and will not qualify.
Before or whilst applying, you must not give any false information, hide any information or give away or sell items to reduce your assets. Whilst you have a debt relief order you cannot obtain any credit over without telling the lender that you have one. You can also not carry on a business in the same name or a different name without permission from the Court or be involved in the setting up of a limited company. If you have provided any false information or not followed the rulings you can be given a debt relief restriction order which means the restrictions on what you can and can't do will remain in force for anything from 2 years to 15 years, although your actual debt relief order will only last 12 months after which the debts will be written off. You must inform the Official Receiver of any change in your circumstances during the application or whilst it is in place.
Once the debt relief order is finished all your debts listed in the order will be written off. You will still need to repay any other debts that were not included. You can apply for a new one after 6 years. The debt relief order will be listed on your credit file and remain there for a period of 6 years. You may find that by doing this can affect any future applications for credit and you may also find you will have difficulty in opening a bank account once you have had a debt relief order. However, defaulting on your debts and non payment to your credit cards etc will also be listed on your credit file and will also affect your credit rating when applying for any further debt in the future. This is also the same if you were to go bankrupt.
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