The Government confirmed in October 2026 that the debt threshold for a Debt Relief Order (DRO) will increase from £30,000 to £50,000 with effect from 1 November 2026. The change is made by statutory instrument under the Insolvency Act 1986 and follows similar increases in 2009, 2015, and 2021 that have progressively extended the DRO regime to people with higher levels of debt.
What is a Debt Relief Order? A DRO is a low-cost insolvency option for people who have relatively low assets, low income, and debts they cannot repay. It freezes debt enforcement for 12 months and, if your situation has not materially improved at the end of that period, the debts are written off. Unlike bankruptcy, a DRO costs only £90 (a fee paid to the Insolvency Service), does not involve a court hearing, and is administered through an approved debt adviser. Key eligibility conditions: total debts must not exceed £50,000 (from November 2026); total assets must not exceed £2,000 (excluding a vehicle worth up to £4,000); and surplus monthly income after reasonable domestic expenses must be £75 or less.
What debts are covered? DROs cover most unsecured debts — credit cards, personal loans, overdrafts, utility arrears, council tax, and benefit overpayments. Excluded debts (which continue regardless) include student loans, child support, court fines, and any debt incurred by fraud. Mortgage arrears and other secured debts are not covered — the creditor retains the right to repossess the secured asset.
Practical effect. The threshold increase brings an estimated 200,000 more people within DRO eligibility. If you are dealing with unmanageable unsecured debt and your income and assets are low, a DRO may be a faster and cheaper alternative to bankruptcy. Approved debt advisers (listed by the Insolvency Service) must make the application on your behalf — you cannot apply directly. Citizens Advice and StepChange both provide DRO referral services. For the limitation rules on debt enforcement before insolvency is needed, see the statute-barred debt ruling news item and the limitation period glossary entry.