You might remember that earlier this year, we at Christians Against Poverty (CAP) were asking people to write to their MPs. We were campaigning to improve the Debt Relief Order (DRO) so that more people on low incomes have a realistic way to become debt free. Today we’re back to update you on the impact you had by joining that campaign.
But first, a quick reminder in case you’re not sure what a DRO is (we understand that not everyone gets as excited about routes out of debt as we do!). If someone’s in so much debt that they have no realistic hope of repaying it, there are options to have those debts written off, sometimes using your assets (like a car or property) towards the costs. The best-known option is bankruptcy. But bankruptcy costs £680 in England and Wales. What do you do if you just can’t afford to save up that much money?
Well, there’s another option called the Debt Relief Order. It was intended to help people on low incomes, who couldn’t possibly save up that fee, let alone pay back their debts (like so many of the clients we work with at Christians Against Poverty), to have a chance at becoming debt free.
So that’s the background, now on to the impact you’ve had. Firstly, we’d like to say a huge thank you to everyone who wrote to their MP. Your voice has made a difference to the lives of many of our clients.
We’d noticed that many of the very people for whom DROs were meant to be a lifeline, weren’t able to meet the criteria for them. Some owed too much money to qualify. There were even instances where someone needed a DRO but would have had to give up their mobility scooter as part of the process, which we’re sure you’ll agree isn’t fair at all.
The great news is that after our campaign and a consultation, the Insolvency Service has announced some changes. They are increasing the amount of debt that can be written off through a DRO. The person accessing the DRO will also be able to keep a (reasonably-priced) car so that they don’t lose transport for work and other essential journeys. Crucially, they’ve clarified the guidance to make sure no one loses their mobility scooter as part of a DRO, if it’s deemed to be an essential vehicle.
The impact of our Simplify the Solution campaign can be seen in the Government’s response. As a result of the changes to the DRO criteria, the Insolvency Service estimates over 13,000 more people will access the process each year. That’s 13,000 more people with a suitable route for getting out of debt, who now have a chance at a financial new start, without the stress of debt weighing down on them and their families.
So next time you wonder whether it’s worth the effort to sign that petition or write that letter of support, know that your voice can make a difference! Together, we can speak up and bring about meaningful change.