Learn something new every day
More Info... by email
A debt relief order is a type of legal authorization that is used to provide total or partial debt forgiveness to debtors. This type of debt reduction of elimination is available in a number of countries around the world, and generally requires that the debtor file specific requests with a court of jurisdiction in order to be considered for this means of dealing with debt that has become impossible to manage. Typically, the court system will have specific criteria that the debtor must meet in order to be granted debt relief under the terms of the order.
Obtaining a debt relief order entails filing a request with the court of jurisdiction. Depending on prevailing laws, some citizens may be able to file the documents personally, while in other areas the request must be filed with the assistance of legal counsel that is authorized to offer services in that jurisdiction. The request will usually require the submission of supporting information and documents that help the court to understand the current financial circumstances of the debtor, including contact information that makes it possible to verify the information provided. Depending on the outcome of the investigation surrounding the request, the court may order partial debt forgiveness that helps to alleviate some of the outstanding debt, or order that all the debt identified in the request be dismissed.
Generally, a debt relief order is only issued when other alternatives to debt settlement are not viable. For example, someone who is permanently disabled, cannot work to earn a living, and has no real assets may be able to obtain this type of relief. By the same token, someone who could conceivably make use of methods such as debt consolidation or even bankruptcy are much less likely to be granted a debt relief order.
As with any means of managing debt, the debt relief order is not the ideal solution for everyone. Depending on the prevailing laws in the jurisdiction in which the order is written, the end result can be an adverse impact on the debtor’s credit rating. In addition, it is often not possible to obtain a second debt relief order for a certain number of years after the granting of the first order. Courts will typically encourage debtors to use whatever methods are available to settle as much debt as possible before attempting to obtain this type of protection from creditors, using the debt relief order as a last resort.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!