All DRO applications will be assessed within two working days of being received by the DRO Unit for determination. 

46.45 Basic grounds under which the official receiver may refuse an application for a DRO

In basic terms, the official receiver may decline an application for a DRO on the following grounds:

• The application does not meet the requirements set out for the format and content of an application for a DRO (see Part 2) [note 2].
• Queries raised with the debtor have not been answered to the satisfaction of the official receiver within such time as he/she may specify [note 3].
• The debtor has made any false representation or omission in making the application or in supplying any information or documents in support of it [note 4].
• The debtor has entered into a transaction at an undervalue or a preference [note 5].

Each case is considered on its own circumstances in the round and the materiality of the debtor’s conduct is taken into account. A decision is then taken by the official receiver as to whether the conduct in question should adversely affect the determination of the application

46.46 Basic grounds under which the official receiver must refuse an application for a DRO

The official receiver must decline an application for a DRO if he/she is not satisfied that:

• The debtor is an individual who is unable to pay his/her debts (see paragraph 46.7) [note 6].
• At least one of the specified debts was a qualifying debt at the date of the application (see paragraph 46.9) [note 7].
• The other eligibility criteria in respect of property level, income surplus level, debt level and insolvency history - see Part 1) are met [note 8].

46.47 Refusal of an application

If the official receiver declines an application he/she must give reasons for the decline [note 9].  The official receiver must send a notice in writing (by post) to the debtor stating that he/she has decided to decline the debtor’s application, and the reason for which it has been declined [note 10].

46.48 Presumptions to be made by the official receiver when considering the application

The DRO process is designed to be a low-cost alternative to those debtors who are unable to access other forms of debt relief (for example, bankruptcy or IVA).  The legislation allows the official receiver to make certain presumptions regarding the debtor’s application, without the need for further enquiry [note 11].

In essence, these provisions allow the official receiver to presume that the information in the debtor’s application is correct unless information to the contrary is available.  The legislation does allow that some basic verification checks are carried out (see paragraph 46.49).

46.49 Verification checks

The DRO process does not involve an interview with the debtor and, generally speaking, the official receiver is entitled to presume that the facts stated in the debtor’s application are true (see Part 2).  The legislation provides for verification checks to be carried out.  In the main, these are checks on the IIR (to check insolvency history) credit reference agency (to confirm ID, domicile, debt levels, property levels) [note 12].

46.50 What happens if a debtor has omitted to list a creditor in their application?

If a debtor has omitted to list a creditor in their application then, assuming the creditor was a qualifying creditor (see paragraph 46.9), the effect of the omission will depend on whether inclusion of the creditor would bring the debts above the £15,000 threshold (see paragraph 46.8).  If the new debt takes the total debts over £15,000, this will result in the DRO being revoked (see Part 4).  If the level remains below £15,000 the DRO will remain in force, but the omitted creditor will fall outside the proceedings.

46.51 Format of debt relief order

If the official receiver determines that the debtor’s application should result in the approval of a DRO application, then he/she must make the order [note 13].

The order must contain the debtor’s name and address, the reference number allocated to the application, a list of the qualifying debts as at the date of the application, specifying the amount owed and the creditor to whom it was owed and the date on which the order was made [note 14] [note 15].

Each qualifying debt (see paragraph 46.9) specified in the order this way is known as a ‘specified qualifying debt’ or a ‘specified debt’ [note 16].

46.52 Action required by official receiver on making of DRO

On the making of the DRO, the official receiver is required to give a copy of the order to the debtor [note 17], and to make an entry in the DRO register (IIR) (see paragraph 46.56) [note 18] [note 19].  The delivery of the order to the debtor is achieved by sending it by post.

In addition, the official receiver must notify the intermediary (see Part 6) of the making and date of the order [note 20].

46.53 Notice to be sent to creditors on making of DRO

The official receiver must also notify each creditor to whom a qualifying debt (see paragraph 46.9) is specified (see paragraph 46.51) of the making, date and reference number of the order and its effect, along with the matters to which a creditor may object to a DRO (see paragraph 46.58) and the contact details of the official receiver [note 21].

46.54 Other action required by official receiver on making of DRO

Where the debtor is involved in a debt management plan, administration order or is the subject of an attachment of earnings order, the official receiver must inform the body or the court, as the case may be, of the making of the DRO [note 22].

46.55 Timing of notices to be sent on making of DRO

The DRO Unit (see paragraph 46.3) will normally issue the notice to the debtor within 5 days of the determination date and notices to the creditors within 10 days of the determination date.   

46.56 DRO register

DROs are registered by recording details of the order in the Individual Insolvency Register (IIR) (see paragraph 46.83).

46.57 The effective date of a DRO

The DRO takes effect from the date that details of it are entered in the DRO register (see paragraph 46.56) [note 23], which is the date that the order is determined (see paragraph 46.51).

[Back to Part 2 – Application for a DRO] [On to Part 4 – Investigation into the debtor’s affairs and the revocation and amendment of a DRO]