Comparison · Debt · 2026
Debt Relief Order vs Bankruptcy UK 2026: Costs, Eligibility and Which to Choose
A Debt Relief Order (DRO) and bankruptcy are both formal insolvency solutions that can write off unaffordable debt, but they are designed for different situations. A DRO is a low-cost route for people with minimal assets, low income and debts under £50,000. Bankruptcy has no debt limit but costs more and can put valuable assets, including your home, at risk. Here is how they compare in 2026.
TL;DR - 30-Second Summary
- - DRO: £90 fee, debts under £50,000, assets under £2,000, disposable income £75/month or less
- - Bankruptcy: £680 fee, no debt limit, assets (including home equity) can be sold to repay creditors
- - Both: usually last 12 months, recorded on credit file for 6 years and on the Insolvency Register
Side by Side: DRO vs Bankruptcy
| Feature | Debt Relief Order | Bankruptcy |
|---|---|---|
| Application fee | £90 | £680 |
| Debt limit | £50,000 maximum | No limit |
| Asset limit | £2,000 (plus one vehicle under £2,000) | No limit — assets can be sold |
| Disposable income limit | £75/month or less | No limit — surplus may trigger an Income Payments Agreement |
| Home ownership | Must not own a home with equity | Home can be sold to repay creditors |
| Application route | Via an authorised debt adviser only | Direct online application (adviser optional) |
| Typical duration | 12 months | 12 months (discharge), up to 3 years if IPA applies |
What Is a Debt Relief Order?
A DRO is designed for people with relatively small debts, minimal assets and very little spare income who cannot afford to repay what they owe. Once granted, a 12-month moratorium begins during which creditors cannot chase you for the debts included. If your circumstances have not materially improved by the end of the 12 months, the included debts are written off completely.
To qualify, your total unsecured debts must be £50,000 or less, your assets (excluding necessary household items and one car worth under £2,000) must be worth £2,000 or less, and your disposable income after reasonable living costs must be £75 a month or less.
What Is Bankruptcy?
Bankruptcy is a formal legal process with no upper debt limit, applied for online via gov.uk for a total cost of £680. An Official Receiver takes control of your financial affairs, can sell valuable assets (including a share of your home if you own one) to repay creditors, and can require an Income Payments Agreement of up to 3 years if you have surplus income above a set threshold.
Most bankruptcies are discharged after 12 months, at which point remaining qualifying debts are written off. Bankruptcy is generally used by those with debts too high for a DRO, or who own assets that exceed the DRO limit but still need debt to be written off.
Which Should You Choose?
- - Total debts are under £50,000
- - You have few or no valuable assets and do not own a home with equity
- - Your spare income after essentials is £75/month or less
- - You want the lowest-cost formal debt write-off route
- - Your debts exceed £50,000 or you have assets above the DRO limit
- - You need the debt fully written off quickly and can pay the £680 fee
- - You do not own a home, or accept the risk to home equity
- - Other solutions (IVA, DMP) are not viable for your income level