Thousands of UK residents could be owed a £90 refund after a recent update to the way Debt Relief Orders (DROs) are administered. The change, implemented in April 2024, has triggered a detailed review by the Insolvency Service to identify individuals who may have been affected.
According to coverage by the Manchester Evening News, this review targets applicants who started the DRO process in previous years but never completed it.
While the financial implications are limited, the potential for a refund is real and now being communicated directly to those concerned, as part of an ongoing outreach effort by the authorities.
DRO Fee Removed Following Regulatory Update in April 2024
As of April 2024, the £90 fee required to initiate a Debt Relief Order has been abolished. A DRO provides legal protection for financially vulnerable individuals by freezing debt payments and suspending creditor contact for 12 months.
The removal of the fee was part of a broader policy to increase accessibility to debt relief for low-income individuals.
Mirror Report Identifies 5,000 Incomplete Applications Since 2016
According to The Mirror, approximately 5,000 people began a DRO application between 2016 and April 2024 but never completed the process. These individuals paid the required £90 fee at the time but did not proceed with submission, making them now eligible for a refund under the new policy.
The Insolvency Service began notifying eligible individuals about two months ago. So far, around 1,000 people have successfully claimed their refunds, leaving an estimated 4,000 still eligible.
A second wave of notifications will be issued in the coming days, and electronic notifications will be sent in addition to postal correspondence.
What Applicants Need to Provide
Eligible individuals are advised to contact the Insolvency Service by email at dro.preorder@insolvency.gov.uk. The refund request must include the following details:
- Full name
- Address
- Bank account number (full 8 numbers)
- Bank sort code (full 6 numbers)
- Account name (as shown on bank statement)
- Building Society roll number (if applicable)
- Name of the bank or building society
- Debt Relief Order application number (if known)
- Your telephone number
If a charity, adviser, or other third party paid the £90 on behalf of the applicant, their details must be provided so that the refund can be issued directly to them.
Updated Contact Details Encouraged
Caroline Shanahan, senior official within the Personal Insolvency Team at the Insolvency Service, emphasized the importance of updated contact information. She stated:
“In some cases, people may have changed their email address or moved home, meaning we do not have their current details to contact them.”
“Those people can still apply for a refund if they paid towards a debt relief order that was not submitted, they just need to get in touch and let us know.”
Applicants who have moved or changed their email address since their DRO attempt are advised to include both their previous and current contact details in their communication.
