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What are the effects of a DRO?
During the period that an order is in force, the debtor will:
• Be protected from enforcement action by the creditors included in the application (bar certain creditors whose debts cannot be scheduled in the DRO and those creditors whose debts are included in the DRO but who have successfully obtained leave from the court to pursue their debts).
• Be free from those debts at the end of the period (normally12 months from Order).
• Be obliged to provide information to and co-operate with the Official Receiver.
• Be expected to make arrangements to repay their creditors should their financial circumstances improve.
As with other forms of personal insolvency, a DRO debtor’s credit rating will be affected and there will be civil and criminal penalties for those who abuse the system.
The Official Receiver is able to investigate, either on his own account or as the result of an objection from creditors, and is able to revoke the order if the debtor is found to have failed to provide a full and accurate account of their financial affairs (for example, an understatement in their assets or income). Failure to provide such an account may result in civil and criminal sanctions.