Debt Relief Order Reforms hailed

Proposals to reform Debt Relief Orders or DRO’s to allow debtors with an approved pension to have access to the scheme have been hailed by debt charities and insolvency industry representatives across the country.

The announcement follows a government consultation launched in March this year addressing concerns that DRO’s excluded vulnerable people struggling with small debts.

These debtors could not access the scheme because they had pensions, often of small value and not receivable for many years. The proposals will change the rules to allow those with rights to approved pensions to have access to DROs.

Sue Edwards, head of consumer policy at Citizens Advice, said: “We warmly welcome this announcement which will benefit those who fulfil most of the criteria for a DRO yet were having applications rejected because of very small pension funds, something that has been of great concern to us.”

Meanwhile Steven Law, president of insolvency trade body R3, said the decision was “good common sense”.

He said: “It seemed counter-intuitive to discourage even those with a very small pension pot which could be years away from being drawn down.

“We look forward to hearing more on the detail of these revised criteria but it should allow many more to take up this accessible and low-cost form of statutory debt relief.”