Restrictions placed by the DRO:
- If you wish to obtain credit of £500 or more, either alone or jointly with another person, you must first tell the lender that you are subject to a DRO. This restriction applies to borrowing money, and also to getting credit by acting with the intention of getting it, even though you have not entered into a specific agreement for it. This would include, for example, ordering goods without requesting credit but then failing to pay for the goods when they are delivered.
- If you carry on a business (directly or indirectly) in a name that is different from the name under which you were granted a DRO, you must first tell all those with whom you do business the name under which you were granted a DRO.
- You may not be involved (directly or indirectly) with the promotion, management or formation of a limited company, and may not act as a company director, with out the court’s permission.
- You will not be eligible to apply for a DRO again for 6 years.
- You are permitted to open a new bank or building society account after the granting of a DRO. However, the bank or building society may require you to disclose that you are the subject of a DRO. It may then decide whether or not to permit you to open an account, and whether to impose any conditions or restrictions on the use of the account. You must also tell the bank or building society that you are subject to a DRO before you apply for any overdraft facilities.
- If you are subject to a DRO you must not write cheques that are likely to be dishonoured (bounce).
The official receiver can apply for a Debt Relief Restrictions Undertaking (DRRU) if:
- If the official receiver decides that you have been dishonest before or during your DRO or that you are otherwise to blame for your position, they ask you to agree to a DRRU (Debt Relief Restrictions Undertaking). An undertaking is an agreement to do or not to do something. A DRRU has exactly the same effect as a DRRO, but if you enters into a DRRU you will not have to attend a court hearing. The period of restrictions is likely to be shorter than if the court made a DRRO. You would be able to put their comments to the official receiver who may further reduce the period if they decide this would be reasonable.
- If an undertaking cannot be agreed or you refuse, they may apply to the court for a DRRO (Debt Relief Restrictions Order). The court may make an order against you for between 2 and 15 years, and this order will mean you continue to be subject to the restrictions of a DRO, as described above. Your details will also be kept on the Individual Insolvency Register for the lifetime of the order plus an extra three months.
- If you incur new debts after the DRO, this could result in a bankruptcy order or prosecution if, when you incurred debts, you did not disclose that you were subject to a DRO.
Debt Relief Restrictions Order (DRRO)
When deciding whether to grant a DRRO, the court may take into account your conduct before and after the date of the debt relief order, so the official receiver will look closely at all conduct. Below are some examples of conduct that the official receiver could use as evidence in their report:
- incurring debts that a person knew they had no reasonable chance of repaying;
- giving away assets or selling them at less than their value;
- deliberately paying off some creditors in preference to others;
- gambling or making rash speculations or being unreasonably extravagant;
- failing to keep or produce records that would explain a loss of money or property;
- fraud, or fraudulent breach of trust;
- failing to cooperate with the official receiver;
- causing debts to increase by neglecting business affairs;
- failing to supply goods or services that have been paid for;
- carrying on a business when the person knew or ought to have known that they could not pay their debts.