Changes in debt relief management will provide lifeline to thousands

The abolition of the Debt Relief Order fees, as announced in the Chancellors Spring Budget, will enable thousands of vulnerable people, the chance to access the vital support they need to eliminate debt reports Citizen’s Advice South East Wales (CASEW).

In 2023, Citizens Advice South East Wales (CASEW) helped almost 13,000 clients with debt issues, clearing nearly £11 million worth of debt. Of those 13,000 clients, 1,400 were advised on accessing a Debt Relief Order to resolve their debts. With the scrapping of the debt relief fee, thousands of people will now be able to access the help they need.

42-year-old Karen from Caerphilly was one of those people who was saved by her Local Citizens Advice office after they helped secure her the grant she needed to cover the debt relief fee and have her debt of £6k cleared.

Karen struggled to keep up the repayments on her mounting debt, plus interest, after she was made homeless trying to flee an abusive partner. Karen had no savings, and her monthly income wasn’t sufficient to cover all her outgoings, plus her debt, or the £90 administration fee to apply for a Debt Relief Order (DRO). As a result, Karen was in despair and her mental health and wellbeing was being impacted.

Luckily for Karen, an advisor at her Local Citizen’s Advice managed to secure a grant to cover the DRO fee, and she was able to have her debt relief application approved.

Karen said, “It was such a stressful time in my life.  I had literally no spare money for the debt relief order fee. If it wasn’t for the support, I received from the Citizens Advice South East Wales advisor, to secure the grant for the fee, I don’t know where I would be now. I am so grateful for the help and guidance I received as I am now debt free, and I can move on with my life.”

A Debt Relief Order (DRO) is a solution that helps people to deal with personal debts up to £30k. However, the £90 administration fee, which needed to be paid before the order was processed, regardless of eligibility, often stood in the way of many people being able to access this essential support.

Simon Ellington, a trustee of Citizen’s Advice South East Wales said: “People who apply for a Debt Relief Order are in despair over their finances, often struggling to pay bills, mortgage, and support their family, let alone pay outstanding debts.

“Therefore, the fee of £90 which was required for people to be able to apply for the order, stood in the way of them being able to access the lifeline they needed to eliminate their debt.

“The abolition of this fee will mean that more people will be able to secure the necessary support they need to clear debts, wipe the slate clean and start again financially.”

Citizen’s Advice South East Wales (CASEW) was established in 2022 and is made up of a collective of eight Local Citizen’s Advice offices from across South East Wales, from Monmouthshire to Bridgend. By working together, CASEW are able to provide people across South East Wales with better access to the advice they need, while developing innovative new ways to deliver its services. Their collaborative ways of working ensure that no one across the region is left behind.