People struggling with debt 'they can't pay back' to benefit from rule change

People who are struggling with large amounts of debt that they cannot pay back will have easier access to Debt Relief Orders from today , after a major policy shake-up aimed at the millions of households across the country that have racked up debt amid the cost of living crisis.

Those who are trapped in this cycle of debt can apply for a Debt Relief Order, which helps them write off their debts and make a fresh start, but previously it cost £90 to apply which pushed many of the poorest in society away from accessing help. From today, this fee has been removed, opening up the system to more people with unmanageable debts.

"The government is removing that £90 fee from April 6, 2024. From that point, DROs will be a free service that we deliver in partnership with the debt sector. We know that the fee was, for some, a barrier to dealing with their debts. Removing it is a big step forward in helping those most in need to find a sustainable solution that works for them."

While the £90 charge has been dropped as of today, other changes are due to come into effect later this year on June 28. This includes the boost to the amount of debt that can be relieved and an increase in the value of a vehicle that a person can keep under a Debt Relief Ordwe, from £2,000 to £4,000.

Source: Loan Digest (loandigest.net)

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