A debt relief order is a relatively new debt solution but that may be the best as compared to an Individual Voluntary Arrangement (IVA). Debtors who have small incomes with relatively low debts and fewer assets should weigh the pros and cons of a DRO against an IVA as there is different eligibility criterion for both debt solutions.

Objective of a DRO and an IVA

A DRO and an IVA both have the same result i.E. The debtor will become free of debts. Both DRO and IVA do not cover all debts, these debt solutions only cover unsecured debts. In both debt solutions after a certain period debtor’s debt will be cleared. Creditors cannot pressurize any debtor who has been accepted for a DRO or an IVA. The biggest advantage of DRO is the time scale of the process, an IVA takes up to five years to complete on the other hand a DRO will only take a year.