CALLS FOR NORTHERN IRELAND TO IMPLEMENT TRANSFORMATIVE DEBT MEASURES

– Advice NI urges Assembly to protect those most vulnerable in society –
– DRO threshold in Northern Ireland is now less than half in England and has not been increased since 2010 –

Advice NI has addressed the Committee for Economy urging that Northern Ireland must follow new Debt Relief Orders (DROs) rules applied in England and Wales – transformative measures for those facing the burden of debt. Since 2021, Northern Ireland’s DRO legislation has lagged England and Wales, leaving the most vulnerable in society at a disadvantage.

In this year’s spring budget, the Chancellor announced further favourable changes to the DRO system in England, including the removal of the £90 administration fee associated with DROs and increased the maximum debt threshold from £30,000 to £50,000 – whilst also increasing the allowable value of retained motor vehicles from £2,000 to £4,000 – across England and Wales. Whilst, Northern Ireland has introduced one change in fourteen years, increasing the car allowance from £1,000 to £2,000.

A DRO is a legally binding agreement between individuals and creditors, preventing further action to recover debts. After one year, debts are written off and the application process is facilitated through approved intermediaries. The current debt threshold for DROs in Northern Ireland is now less than half of the threshold in England and Wales at £20,000 and has not been increased since 2010.

Sinead Campbell, Head of Money Debt and Quality at Advice NI, has expressed grave concern for people in debt, as Northern Ireland is disproportionately at a disadvantage in comparison the rest of the UK with outdated debt relief measures.

Sinead said, ” While England and Wales are taking significant steps to support those grappling with debt, the absence of parallel measures in Northern Ireland is deeply troubling. We now call upon the Assembly to make the same legislative changes to bring Northern Ireland back in line with England and Wales to ensure that no further unnecessary hardship is caused to our citizens.

“Individuals with debt issues in Northern Ireland still face a £90 fee when applying for a DRO – which is a huge barrier for those on low income. In England and Wales this fee has been abolished, leaving vulnerable individuals in Northern Ireland at a disadvantage and without a necessary financial lifeline

“Additionally in Northern Ireland the maximum debt value threshold for DRO applications is capped at £20,000 and has been since its introduction in 2010. In stark contrast, England and Wales have adapted to the ongoing cost of living crisis by increasing their thresholds to £30,000 during the pandemic and now to £50,000.

“Northern Ireland needs to mirror the progressive measures taken in England and Wales. By eliminating the £90 DRO fee and raising the criteria thresholds, Northern Ireland can provide a lifeline for those struggling with debt, offering them a chance at a fresh start amid these challenging economic times.”

Qualifying debts with a DRO include arrears with rent, utility bills, telephone bills, rates, income tax, outstanding borrowing on credit cards, loans and overdrafts, business debts, and money owed to friends and family. There is no requirement to make payments towards most types of debts included in a DRO, and creditors cannot force individuals to settle debts. A typical DRO lasts for one year, and offers a pathway towards financial recovery.

Advice NI is urging households and businesses facing financial difficulties to proactively seek support and get in touch with its free, impartial, and confidential Debt & Money Service.

Since 2019 Advice NI and its members have helped over 19,000 clients deal with £205.6m of debt, signalling the need for an affordable debt remedy and solution for those struggling.  Get in touch by calling the freephone helpline on 0800 915 4604 to speak directly to an adviser between 9:00am and 5:00pm Monday to Friday or visit adviceni.net.