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Debt relief restrictions orders
If the official receiver believes you made your debt situation worse before you applied for a debt relief order (DRO), or you've acted dishonestly or done something against the rules when you applied or while your DRO is in force, they can ask the court to make a debt relief restrictions order (DRRO) against you.
This page explains what a DRRO is, how it can affect you and what to do if you receive notice of intention to apply for a DRRO.
Reasons why restrictions may be made against you
If the official receiver believes you made your debt situation worse before you applied for a debt relief order (DRO) or you've acted dishonestly or done something against the rules when you applied or while your DRO is in force, they can ask the court to make a debt relief restrictions order (DRRO). Reasons why the official receiver may ask for a DRRO include where you:
- took on debts at a time when you had no chance of repaying them
- gave away belongings of value or sold them at less than their value
- paid off some creditors in preference to others
- committed fraud
- didn't co-operate with the official receiver
- didn't tell the official receiver about assets you had when you made the DRO application or that you gained during the DRO period, such as a payment protection insurance (PPI) payout
- carried on a business when you knew you couldn't pay your debts.
What do restrictions mean for you?
If the court makes a DRRO, the restrictions that you have to follow while the DRO is in force are extended for up to 15 years. If you don't follow the restrictions, you will be committing an offence. You could be fined or sent to prison.
The DRO period will still end after 12 months and you won't have to pay off any of the debts included in the order, unless they happened because of fraud. You may still have to pay rent arrears if you want to stay in your home. If you're not sure, ask your DRO adviser about which debts you still have to pay at the end of your DRO.
Top tipIf you're unsure about what to do with a notice of intention to apply for a DRRO, speak to your DRO adviser.
Received a warning that restrictions might be made
Before the official receiver asks the court for a DRRO to be made against you, they will contact you to warn you a DRRO is being considered, and offer you a face-to-face interview at your local official receiver's office. If you prefer, the interview can be carried out over the phone.
At the interview, they'll explain why the think a DRRO could be made against you and give you the opportunity to explain your point of view and provide any evidence that might help your case. You can bring someone to the interview with you, such as your DRO adviser or a friend.
After the interview you will either be told that no further action will be taken, or be informed that the official receiver is planning to apply for a DRRO against you.
Received notice of a debt relief restrictions order
If the official receiver wants to apply for a DRRO against you, you'll get a letter informing you of this. The letter will include a copy of their report explaining why they think you should be given a DRRO. You will have 21 days to respond.
What you should do depends on whether or not you accept the allegations that have been made against you.
If you accept the official receiver's reasons
If you accept the Official Receiver's reasons for a DRRO, you can offer to agree a debt relief restrictions undertaking (DRRU). This has exactly the same effect as the DRRO but
- you won't have to attend a court hearing
- your period of restrictions is likely to be shorter than if the court made a DRRO.
If you dispute the official receiver's reasons
If you dispute the reasons, the official receiver will apply to the court for a DRRO. You'll get a letter giving you at least eight weeks' notice of a court hearing date along with details of the evidence against you. You need to:
- acknowledge that you've received the documents within 14 days, using the form you're sent
- send your evidence to the court within 28 days of receiving the notice
- attend the court hearing. If you don't attend, a decision will be made without you.
The hearing will look at all the evidence and decide whether to make a DRRO against you.
If you change your mind at any point, you can still offer to enter a DRRU.
If you ignore the notice
If you ignore the notice of intention to apply for a DRRO, the court will look at the official receiver's evidence and may then make a DRRO. This will mean a decision is made without your evidence or arguments, so you should never ignore the notice.
Speak to your DRO adviser
If you get a notice of intention to apply for a DRRO you should speak to your DRO adviser before you respond. Make sure you do this within the time limits you've been given so that you don't miss any deadlines.
After restrictions are made
If a DRRO is made or you enter into a DRRU, the restrictions apply immediately. Your details will stay on the Individual Insolvency Register, which is publicly available, for the full period of the DRRO or DRRU.
If you don't follow the restrictions
If you don't follow the restrictions, you'll be committing a criminal offence. This means you could be fined or even go to prison.
If your DRO is stopped
If your DRO is stopped (revoked) at any point, the DRRO or DRRU will still be active, unless the court makes an order that it is not. This means you still have to follow any restrictions placed on you by the DRRO.
Other useful information
'Debt Relief Restrictions Orders' - leaflet from the Northern Ireland Insolvency Service at www.economy-ni.gov.uk.