8 Debts That Can Be Included in a Debt Relief Order

A Debt Relief Order is a form of insolvency available in England, Wales and Northern Ireland. It offers an alternative to bankruptcy for people who cannot realistically pay off what they owe. Once a DRO is in place, your creditors cannot chase you for the debts included in it, and after 12 months the debts are usually written off entirely.

To qualify for a DRO in 2026, you need to meet several criteria. Your total qualifying debt must be below £50,000, you must have £75 or less per month in spare income after essential living costs, and your assets must be worth £2,000 or less (excluding a vehicle worth up to £4,000). You must also have lived or worked in England or Wales within the last three years.

Your name will appear on the Individual Insolvency Register for the duration of the DRO plus three months. Not every debt qualifies for inclusion: student loans, criminal fines and some other debts are excluded. The debts that can be included are known as qualifying debts.

1. Council Tax and Utility Arrears

Household arrears are among the most common debts included in a DRO. This covers outstanding council tax, gas, electricity, water and telephone bills. Council tax arrears are particularly important to address, as local authorities have strong enforcement powers, including the use of bailiffs and, in extreme cases, committal proceedings.

A DRO is one route for clearing council tax debt. Bear in mind that only arrears up to the date of the DRO are covered. You will still need to keep up with your current council tax payments going forward.

2. Credit Card Debt

Credit card debt is one of the most widespread forms of unsecured borrowing in the UK. According to MoneyHelper, many households carry significant credit card balances that can quickly grow due to compound interest. If you are only making minimum payments, it can take years to clear the balance.

Credit card debt is a qualifying debt for a DRO. Once included, your creditors cannot pursue you for the balance during the moratorium period, and the debt is written off at the end.

3. Payday Loans

Payday loans are short-term, high-interest loans typically borrowed between paydays. They usually range from £50 to £1,000 and are designed to be repaid within weeks. The interest rates on these loans can be extremely high, and many borrowers find themselves in a cycle of re-borrowing.

If you are trapped in payday loan debt, a DRO can provide a clean break. Payday loan debts are qualifying debts and can be written off at the end of the 12-month DRO period.

4. Overdrafts

Overdraft debt can creep up without you realising, particularly if you treat your overdraft limit as part of your available balance. Banks can charge daily or monthly fees for arranged overdrafts, and unauthorised overdrafts can attract even higher charges.

One thing to be aware of: if your current account is with the same bank you owe the overdraft to, they may use a \”right of set-off\” to take money from your account to recover what you owe. A DRO can include overdraft debt and have it written off after 12 months.

5. Benefit Overpayments

Benefit overpayments happen when you receive more in benefits than you were entitled to. This can occur for various reasons, such as a change in circumstances that was not reported promptly or an administrative error by the Department for Work and Pensions.

Benefit overpayments can be included in a DRO, provided they were not caused by fraud. Once the overpayment is listed in your DRO, the DWP cannot recover the amount during the moratorium, and it will be written off at the end.

6. Hire Purchase and Conditional Sale Agreements

With hire purchase and conditional sale agreements, you do not legally own the item until the final payment is made. If you have paid less than a third of the total amount and miss payments, the creditor may be entitled to repossess the item if you have a DRO.

In some situations, if you are up to date with your hire purchase payments, you may be able to exclude the agreement from your DRO and keep the item. It is important to discuss this with your Official Receiver. You must also inform any hire purchase or conditional sale creditor that you have a DRO.

7. Buy Now, Pay Later and Finance Agreements

Buy Now, Pay Later (BNPL) purchases and other consumer finance agreements, such as those used to buy household items like washing machines or sofas, are qualifying debts for a DRO. These agreements may carry interest after an initial interest-free period, and missed payments can lead to additional charges.

If the finance is secured against the item itself, the creditor may have the right to repossess it. Check the terms of your agreement carefully. BNPL lending is expected to come under full FCA regulation in the near future, which may change how these debts are treated in insolvency.

8. Loans From Family or Friends

Informal loans from family members or friends can also be included in a Debt Relief Order. These are treated the same as any other qualifying debt, which means the person who lent you money will not be repaid.

This can understandably cause tension in personal relationships. If you have borrowed from someone close to you, it is worth having an honest conversation before applying for a DRO so they understand the implications.

A DRO is just one of several debt solutions available. Others include Individual Voluntary Arrangements (IVAs), Debt Management Plans, and bankruptcy. The right option depends on your total debt, income, assets and personal circumstances.

At Swift Debt Help, we can assess your financial situation and help you understand which solution might work for you. This content is for general information only and does not constitute financial advice. Always speak to a qualified professional before making decisions about your debts.