Debt relief order (DRO) meaning

See Q&A: Can executors pay inheritance to a beneficiary who is subject to a debt relief order? Are there are any additional precautions the executors should take? A Debt Relief Order (DRO) is a statutory scheme designed to offer relief to individuals with debts that are unmanageable yet comparatively small, at low cost, for situations where bankruptcy would be a disproportionate step. The regime is set in Part 5 of the Tribunals, Courts and Enforcement Act 2007, which introduced Part 7A into the Insolvency Act 1986 (IA 1986)...

This glossary sets out numerous expressions regularly encountered in the restructuring & insolvency sphere. Words shown in bold within definitions are themselves explained in other entries in this glossary as well. A Article X The MLIJ contains a single provision named Article X, aimed at jurisdictions that have already implemented the MLCBI, like England, or are weighing its adoption. Article X states: ‘Not withstanding any prior interpretation to the contrary, the relief available under [insert a cross-reference to the legislation of this State enacting Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency] includes recognition and enforcement of a judgment’ (see Practice Note: UNCITRAL model law on recognition and enforcement of insolvency-related judgments (MLIJ): Article X). Asset-backed security (ABS) A form of security anchored by asset pools, for example loans, leases, and credit card receivables. Assimilated law From 1 January 2024, ‘retained law’ has been retitled ‘assimilated law’. The body of domestic law originally arising from EU obligations, created by the European...

What is a DRO? Debt Relief Orders are a newer, streamlined route to clear the slate for people who cannot afford to go bankrupt. A DRO is granted in relation to qualifying debts. A qualifying debt is one that is: for a liquidated amount payable now or at a future date unsecured not an excluded debt Under the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 9.2, an excluded debt means: any fine for an offence, or an obligation arising from an order in family proceedings, or a maintenance assessment or maintenance calculation under the Child Support Act 1991 any obligation under a criminal confiscation order student loans damages relating to the death of, or personal injury to, any person a crisis loan or budgeting loan made under the Social Security Contributions and Benefits Act 1992 Who may apply?...

Introduction Part 5 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) set out fresh frameworks for debt management and relief, though some measures remain unimplemented. Although designed to help individuals manage indebtedness more effectively, these changes plainly carry consequences for creditors looking to enforce judgments against such individuals. Through amendments to the County Courts Act 1984, TCEA 2007, s 106 created a new administrative route for debtors without business debts whose income is above what is required for their reasonable needs. TCEA 2007, s 106 has not yet been commenced By further amendment to the County Courts Act 1984, TCEA 2007, s 107 introduced a mechanism allowing a debtor experiencing a ‘sudden and unforeseen deterioration in their financial circumstances’ to seek an enforcement restriction order (ERO). TCEA 2007, s 107 has not yet been implemented By amending the Insolvency Act 1986 (IA 1986), TCEA 2007, s 108 brought in debt relief orders (DROs) as an alternative to bankruptcy for certain debtors. A...