Another Option For Debt Relief Orders

Debt relief orders have been created by the British government as another option for low income debtors to resolve their financial woes. While the process is simple, inexpensive and quick, there are some repercussions that can occur from choosing to file a debt relief order.

There are many advantages to obtaining a debt relief order. The document protects from debtor from any further legal action on the part of their creditors. Typically, a debt relief order lasts for only one year. Following this time period, the debtor is resolved of all of their debts. This is a quick solution as it only involves one year.

There are some obligations that debtors have when seeking a debt relief order. During the time period of the debt relief order, should the debtor's financial situation improve significantly, such as in a situation of obtaining a windfall, they must report this change. The debtor is then responsible for replaying their debts.

Other actions on the part of the debtor could possibly cause the debt relief order to be revoked. Being uncooperative when asked to produce financial records to the official receiver is just cause to revoke the debt relief order. Also, proof of selling off assets at significantly reduced prices is another cause for revocation. This would mean that you might sell off valuable assets to friends or family for the low sum of one pound in order to essentially hide your assets so you can qualify for a debt relief order. After all, to qualify for a debt relief order your assets can not exceed a designated amount. Also, amassing debt prior to the application of the debt relief order can be cause for revocation. This is viewed as intentional as a way in which to profit from the debt relief order.

Also, during the duration of the debt relief order, any type of actions occurring that feature frivolous spending or involve large sums of money can be suspect. After all, by filing a debt relief order, you are declaring that you cannot make payments on your debt. These might include gambling or large pension contributions.

Paul Robgher writes for debt-free.org.uk and takes great pride in helping people to be debt free