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Northern Ireland: IVAs, bankruptcy… and now DROs

Debt Relief Orders have been introduced in Northern Ireland, which could help people who need to enter insolvency, but for whom neither bankruptcy nor an IVA (Individual Voluntary Arrangement) would be appropriate.

In England and Wales, DROs have been around since April 2009. In Northern Ireland, they were introduced last week. The Northern Ireland Executive`s website, northernireland.gov.uk, provides some details, quoting Enterprise Minister Arlene Foster.

The scheme, it explains, has been introduced `to help people who are burdened by debts which they have no realistic prospect of being able to repay`. So there are strict eligibility criteria: people can only enter a Debt Relief Order if they owe less than £15,000 and have little in the way of assets and spare monthly income.

Nonetheless, estimates indicate that up to a thousand people per year in Northern Ireland could enter a Debt Relief Order to tackle their unmanageable debt problems.

To give some background to that figure, a total of 2,323 people entered a personal insolvency solution in 2010. 1,321 entered bankruptcy, while 1,002 entered an IVA.

"I have the greatest sympathy for those affected by the recession who are struggling to meet household bills and pay off past debts," said the Minister.

"The provision of debt relief continues to be a key commitment for my Department and I will continue to give this issue a high priority now and in the future."

A Debt Relief Order will cost applicants just £90 - so just over a quarter of the £345 deposit which is required to petition for bankruptcy.