How a Debt Relief Order Can Help You:
Debt relief order is for those who are struggling in dealing with extremely bad financial straits. A case of when you do not have enough money to be able to afford to pay for living and rent, to essentials such as food and clothing. Debt relief orders can help by offering a fresh start to those in need, so in this blog we will be covering its basics, benefits and how it can give those in need a chance to regain control over their finances.
Who Can Apply For a Debt Relief Order and What Does it Do?
Debt relief order is designed for individuals to help them to escape the struggle of unmanageable debt by creating a legal agreement to freeze the debt for a year. If the person's situation does not improve after the time is up then all of the debt that they had will be completely written off, meaning that no further payments will be due. As much as this is a massive help to many there is still a charge of £90, as well checking you are eligible for before claiming Debt relief order. This solution may not be suitable for everyone as you must meet specific requirements based on income, assets and debts, however it can help to provide relief to those that are struggling with their finances.
How to know if you are eligible
Residency - You must be currently living, or have lived, in the country that you are applying for the debt relief order, for at least three years.
Debt Level - Your total unsecured debts must be below a specific threshold, which varies upon region, but is usually £30,000 or less at the date the application is approved. This includes credit card debt, personal loans making it super important to calculate your total amount of unsecured debts.
Disposable Income - Your disposable income, which is the money that you have left after paying essential living expenses, must remain relatively low. This usually means that you have very little or no money left to pay off your debts after covering essential living expenses like rent, food, utilities and transport.
Assets - You should not have assets exceeding over £2,000, which can include savings, vehicles, and valuable possessions. Although some essential assets are not included during the process such as household items.
No Previous DRO or Bankruptcy - You cannot apply for a debt relief order if you have had one in the last six years or have declared bankruptcy in the last 15 years.
How Debt Relief Order Can Help
Relief From Credential Pressure - Where approved creditors can no longer take legal action against you or pester you with calls or letters demanding for repayments, which can help to reduce stress and anxiety over an already hard time.
Protection of Essential Assets - Many financial situations involving bankruptcy cause people to sell essential assets like houses or cars, but with Debt relief orders you can keep all of these which helps to support those that rely on transport to get to work.
Debt Consolidation - Break down debts into monthly payments helps to create control over finances, making them manageable for those who are struggling.
Affordability - This makes Debt Relief Orders affordable for those with a limited income, for example those with lower wages, disabilities or on fixed incomes.
Support and Guidance - When you apply for a Debt Relief Order you will receive support from a debt advisor or an insolvency partner, who will help you through navigating the process, assess your eligibility and ensure that Debt Relief Order is the right solution for your financial situation.
Shorter duration - A Debt Relief Order typically lasts for one year, which is a lot shorter in comparison to other debt solutions or bankruptcy, helping those in need to become debt-free much quicker.
Rebuilding your finances - After having a Debt Relief Order you can then focus on rebuilding finances, creating an opportunity to become wiser about managing money, creating budgets and work towards improving credit score.
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