Debt Repayment Order (DRO)
A Debt Repayment Order (DRO) is the best insolvency option for you if you owe less than $50,000 in unsecured debt and are able to make some repayments on your debts.
Unsecured debt is money you owe that isn't tied to any specific property or asset. This means if you can't pay it back, the creditor can't automatically take something you own to cover the debt.
On this page
Meet Felicity and George
Watch as Felicity and George talk about their unique financial challenges and explore the options available to each of them.
Watch: I owe less than $50,000 that I can’t manage
Video transcript: I owe less than $50,000 that I can’t manage
[Audio: Upbeat music plays.]
[Visual: Background is 3 geometric triangular shapes in teal, turquoise and coral colours. New Zealand Insolvency and Trustee Service branding in white in the middle of the page.]
[Visual: Title of video appears reading 'I owe less than $50,000 that I can’t manage'.]
[Visual: Screen switches to the presenter standing in an office setting. In the bottom right corner of the frame, a New Zealand sign language interpreter translates throughout the video.]
[Visual: Turquoise box appears in the lower left hand corner, with white writing which reads ‘For debt under $50,000 here are the insolvency options to get you back on track’.]
[Audio: Presenter speaks.]
Presenter: If you’ve got to a point where you can’t manage your debt repayments, it could be time to look into an insolvency option.
If you owe more than $50,000 in unsecured debt, bankruptcy is your only option.
[Visual: Turquoise box moves off screen to the left.]
Presenter: It’s still an option if you owe less than that but there are also a few other ways to manage your debt depending on your circumstances.
[Visual: Turquoise box appears on the lower left-hand corner with white writing which reads ‘Debt Repayment Order’.]
Presenter: If you owe less than $50,000 in unsecured debt, and you can afford to repay some of your debts, you can apply for a Debt Repayment Order, or DRO.
[Visual: Turquoise box moves off screen to the left.]
Presenter: If you’ve got less than $50,000 secured or unsecured debt, can’t afford repayments, and you don’t have anything of value that you could sell to help pay it off, you can apply for a No Asset Procedure, often called a NAP.
[Visual: Turquoise box appears on the lower left-hand corner with white writing which reads ‘No Asset Procedure’.]
[Visual: Turquoise box appears in the top right-hand corner with white wring reading ‘These options will have an impact on your credit rating for 5 years or more’.]
[Visual: Turquoise box in the lower left-hand corner moves off screen to the left.]
Presenter: Just remember, all of these options will have an impact on your credit rating for 5 years or more.
[Visual: Turquoise box in the top right-hand corner moves off screen to the right.]
[Visual: Screen switches to Felicity sitting on a sofa/couch.]
[Audio: Felicity speaks.]
Felicity: I don’t know what to do.
[Visual: Turquoise box appears on the lower left-hand corner with white writing which reads ‘Debt Repayment Order’. At the same time another turquoise box appears on the upper right-hand corner with white writing reading ‘Felicity has debt from:
- Buy Now, Pay Later
- Credit Cards
- Personal loans’]
Felicity: I’ve got 3 kids and a full-time job, but I only earn minimum wage, so things are really tight.
I’ve been using the credit card to buy a few extras here and there – like a new washing machine because my old one stopped working – and now paying it off is too much on top of the rent, bills and the personal loan I’ve got!
[Visual: Turquoise boxes both move from the screen. The lower one moves off to the left and the upper one to the right.]
Felicity: I can make some repayments – I just need some help and a bit more time to do it so I can still afford to look after the kids.
[Visual: Screen switches to presenter.]
[Audio: Presenter speaks.]
Presenter: Hi Felicity. Thanks for your honesty. We know it’s not an easy topic to talk about. The first step would be to reach out to a budget advisor or financial mentor to get some advice.
[Visual: Turquoise box appears in the upper right-hand corner. White writing reads ‘DEBT REPAYMENT ORDER’.]
Presenter: Your best option might be applying for a Debt Repayment Order, DRO, if your debt isn’t secured with an item that can be repossessed.
[Visual: Further white writing appears in the turquoise box in the upper right of the screen reading ‘DRO Supervisor’.]
Presenter: If you go down this path, you’ll sign up with a DRO Supervisor who will help you work out how much of your debt you can afford to pay each week. Your DRO Supervisor will work with you, the Official Assignee and your creditors to arrange the details and your payments.
[Visual: Further white writing appears in the turquoise box in the upper right of the screen reading ‘Debts combined’.]
Presenter: When the DRO is finalised, your debts would be combined, and you’d make regular repayments towards them. Every 6 months your creditors will receive payments towards the debt.
[Visual: Further white writing appears in the turquoise box in the upper right of the screen reading ‘Usually lasts for 3 years’.]
Presenter: A DRO usually lasts for about 3 years. You won’t be chased for payments by the people you owe and there won’t be any additional interest or penalties while you’re in the DRO. When your DRO is complete, any unpaid debts included in the DRO are wiped and you don’t have to worry about them anymore.
[Visual: Turquoise box moves off screen to the upper right.]
[Visual: Screen switches to George who is sitting on a sofa/couch.]
[Visual: Turquoise box appears on the lower left-hand corner with white writing which reads ‘Debt Repayment Order’. At the same time another turquoise box appears on the upper right-hand corner with white writing reading ‘George has debt from:
- Car finance
- Utility Bills’]
[Audio: George speaks.]
George: I was doing OK but I don’t earn much and the other day I had to pay for my car to be fixed.
I’m still trying to pay the loan on the car so now I’m behind on all my bills – my rent, my power, even my mobile.
[Visual: Turquoise boxes both move from the screen. The lower one moves off to the left and the upper one to the right.]
George: It’s the first time this has happened to me – I’ve always paid off my debts but right now I don’t have enough money coming in or anything valuable enough to sell to help pay it off.
[Visual: Screen switches to presenter.]
[Audio: Presenter speaks.]
Presenter: Thanks George. Looking for help is a great first step so you’re doing the right thing!
Budget advisors and financial mentors are a good place to start for anyone in your position. They’ll take a look at your budget and help you work out a solution.
[Visual: Turquoise box appears in the upper right hand corner. White writing reads ‘No Asset Procedure.
- Unsecured or secured debt
- Lasts for 12 months
- Enter NAP once’]
Presenter: It might be that a ‘No Asset Procedure’ is the best option for you.
[Visual: Further white writing appears in the turquoise box in the upper right of the screen reading ‘Unsecured or secured debt’.]
Presenter: You can apply for one with unsecured or secured debt.
A NAP doesn’t have as many restrictions as bankruptcy, but it will still have an impact on your credit rating which could affect your access to banking and other services.
[Visual: Further white writing appears in the turquoise box in the upper right of the screen reading ‘Lasts for 12 months’.]
Presenter: With a NAP, debts are wiped after 12 months, but you can only enter into a NAP once.
[Visual: Further white writing appears in the turquoise box in the upper right of the screen reading ‘Enter NAP once’.]
Presenter: So, if you’ve already completed one and can’t afford to make repayments, then bankruptcy is your only option.
[Visual: Turquoise box moves off screen to the upper right.]
Presenter: For more information or to apply for a DRO or NAP, go to insolvency.govt.nz(external link).
[Visual: Turquoise box appears in the lower left-hand corner of the screen. White writing reads ‘insolvency.govt.nz’.]
Presenter: Entering a formal insolvency procedure has consequences that could be significant for you, so it’s worth seeking independent advice.
[Visual: Turquoise box moves from the screen to the left.]
[Visual: Turquoise box in the top right-hand corner moves off screen to the right ‘MoneyTalks 0800 435 123’.]
Presenter: MoneyTalks is a free helpline offering budgeting advice to individuals, family and whānau. They can put you in touch with financial mentors who can help you understand your financial situation, organise your debt and plan for the future. Call 0800 345 123.
[Audio: Upbeat music.]
[Visual: Teal and white New Zealand Insolvency and Trustee Service branding and Digital Boost Branding show in top corners of the screen.]
[Visual: Appearing slowly white writing reads ‘Want to know more? Insolvency.govt.nz’.]
[Visual: White writing fading to plain teal background.]
[Visual: Teal background with the Ministry of Business, Innovation and Employment and New Zealand Government brandings in white.]
[End of video.]
What it is
A Debt Repayment Order (DRO) gives you extra time to pay back some or all of your debt — usually 3 years, though it can be more or less.
It's a formal debt repayment plan with the people or organisations you owe money to (your creditors). After applying for a DRO, you'll sign up with a DRO Supervisor, who'll work with you, the Official Assignee (the government official who oversees the management of DROs), and your creditors to arrange the details and your payments.
You can only get a DRO if you owe less than $50,000 in unsecured debt.
You must be unable to pay off those debts right now, but be able to make some repayments towards them over time.
It may not be a good option if most of your debt is secured or relates to student loans, fines, penalties, and reparation orders, as that debt would be excluded from the DRO and you would have to find a way to pay it as well.
To work out what your DRO repayments might be, use our repayment calculator.
If you are living overseas you can still enter a DRO, but you need to be able to make regular repayments. You will need to find a Supervisor in NZ. Creditors that are not based in NZ might continue to chase you for any money you owe them.
The public register can be searched from overseas. Several credit reporting companies operate in more than one country so your credit rating outside of NZ may be affected.
How it works
You must:
- do everything you're asked to do by the Official Assignee and your DRO Supervisor
- make the agreed repayments
- tell the Official Assignee and your DRO Supervisor if you change your:
- name, e.g. if you get married
- address
- employment
- terms of employment
- income and/or spending
- comply with the terms of the order
- keep paying any other debts that aren't part of the DRO.
You must not:
- take on any new debt over $1,000 without making the new creditor aware that you are currently in a DRO. You should let them know in writing to avoid any misunderstandings.
Once you've entered into a DRO, creditors can't continue to chase you for payment of any unsecured debts included in the order or add any further penalties or interest to that debt.
When you have completed the DRO you don't have to pay anything further towards the outstanding amount owed to the DRO creditors. Note however, that any creditors that are not included in your DRO can continue to chase you for payment. So it is very important to ensure your application includes all unsecured debts that are owed at the time of making your application.
Included debt
Your DRO will include:
- All disclosed unsecured debts at the time of application unless specifically excluded below.
- contingent debts — these debt will only be included in your order if you are required to make payments on the debt at the date of your order. e.g. when you sign as guarantor for a friend’s finance agreement. You don’t have to pay any money now but you might have to repay the debt in the future if your friend doesn't pay as this would be a new debt to you at that future date.
- joint debts — if you owe a debt jointly with another person, the creditor has the right to claim the full amount from either person, so the full amount owed must be included in your order.
- overseas debt — Any unsecured debts owed to creditors that are based overseas are included in the New Zealand order. However, if you return to that country where the liability was incurred then the creditor has the ability the recover any debt that is still owing in that country.
Excluded debt
Some debts are legally excluded from the DRO. You have to pay for them as well as your DRO payments. Excluded debts include:
- child support and maintenance orders
- student loans
- court fines and reparation
- debt that you incurred after applying for a DRO
Secured debts
Secured debts are debts where the creditor can repossess your property if you stop making payments. If you no longer have the property that was secured, then the debt is no longer secured over your property and will be included in the order.
For example, if you stop making the arranged payments for a car you bought on finance, the creditor can repossess the car under the finance agreement.
If there's still money owing after the repossessed property has been sold, the remaining balance is an unsecured debt that will be included in your order.
You keep control of your assets, income and spending when you're in a DRO.
If you want to, you can offer to sell some of your assets in your DRO application, e.g. if you have a car that's not under finance, you can offer to sell it and use the money to pay off some of your debts. Talk to your DRO Supervisor if you want to do this.
Your DRO is administered by a DRO Supervisor who will help you deal with your creditors. You'll appoint a DRO Supervisor after you've applied for a DRO. They're independent from the Official Assignee, who oversees the management of DROs.
The Official Assignee is responsible for making sure that DRO Supervisors do their job according to the law. If they don’t do this the Official Assignee may cancel their appointment and can appoint a replacement Supervisor.
Your DRO Supervisor can:
- make sure that you comply with the terms of the DRO and any other orders made by the Official Assignee
- make your employer pay some or all of your wages into your DRO
- charge a fee for doing their job.
Their job includes:
- sending notices to all of your creditors and asking them to make a claim
- providing information about your DRO to the Official Assignee
- making sure that all creditors' claims are correctly checked
- making sure that all payments to creditors are correct.
If you have any questions about your DRO you should talk to your DRO Supervisor first.
You can also find contact details of Supervisors at local support offices like Citizens Advice Bureau, Budget Advisors or Community Law Centres.
Your Supervisor will pay the money from your DRO in the following order:
- Administration costs — currently 7.5% of your payments.
- The Official Assignee’s costs — currently $102.22 application fee plus 2.5% of your payments.
- The debts owed to your creditors — the amount agreed to when you entered the DRO.
- Any extra money back to you.
To work out what your repayments might be, use our repayment calculator.
Your DRO won't be advertised in a newspaper or the New Zealand Gazette, but it will be listed in the DRO Register on this website. Until your DRO is finished, people can search to find:
- your estate (reference) number
- your full name and any other name you may use
- your address when you entered the DRO
- the date you entered the DRO.
As soon as the DRO is finished, the record will be removed.
How creditors are notified
When you enter a DRO, the creditors will get a report from the Supervisor. They can log onto our website to get updates after the report is sent.
Although a DRO can help to resolve your financial problems, it will have a wider impact on your everyday life.
Note: This is a typical DRO - your DRO might be different depending on your situation and conduct.
1 If your situation changes, including your job, tell your Supervisor.
2 If your situation changes the Order may be varied. At any time during the term of the order your current income and expenditure may be reviewed and the rate of the order adjusted in circumstances where appropriate.
How to apply
After you've applied
- If we need any extra information from you, we'll contact you. If you don’t provide the information quickly, your application may be rejected.
- You'll usually hear from us within 10 working days. If we accept your application, your creditors will be told and given a chance to object. If they don’t object then the order will be made.
- For privacy reasons your application won't be put on the public(external link) register unless it's accepted.
- Until your application is accepted, you'll need to keep dealing with your creditors and make payments as usual.
If your application is rejected by the Official Assignee, you’ll be given the reason in writing. You can ask for the decision to be reviewed. You need to do this in writing within 15 working days — complete the application form below and send it to the Official Assignee by email or post.
Your application will be reviewed and you'll be notified within 15 working days of the Official Assignee’s decision.
You should get advice before making a new application, e.g. from the Budget Advisory Service.
- Your details will appear on our website.
- All of your creditors included in the DRO will be contacted.
- You should contact your secured creditors and arrange to either:
- keep making payments under the agreement, or
- have the secured item returned/repossessed. You can then stop making any payments under the agreement. They can claim against you for any unpaid amount.
- Your Supervisor will tell the Official Assignee if you fail to make any payment due under your order.
- If your circumstances change, you may need to change your order.
- If you don’t make the payments the DRO can be terminated. Then your creditors can start legal proceedings to chase you for the full amount they are still owed, not just the amount you had agreed to pay them under the order. Then your only option might be to go into a No Asset Procedure or bankruptcy.
Some debts are not included in a Debt Repayment Order (DRO). Creditors can keep chasing you for payment of those debts, so you need to make arrangements with them directly.
You can check your estate details on our website to make sure we've been told about the creditor. (You should have been sent an activation code and instructions for setting up an account when your DRO started, if you didn’t already have a username and password.)
- Search the DRO Register for your own name.
- Click on your name (in blue and underlined) to see the basic details screen.
- Click on the More Info button to see details of the claims and check whether the creditor is on the list.
If the creditor is already listed against your estate, then let them know that they need to contact your DRO Supervisor with any questions. If they keep harassing you, tell your Supervisor.
If the creditor is not listed against your estate, then give your Supervisor their details so that they can be contacted and given a chance to file a claim.
Once you have entered an DRO you need to cancel any direct debits, unless the type of debt isn’t included in your DRO, e.g. court fines, Child Support. The Official Assignee cannot cancel the direct debit for you. You will need to contact your bank.
If you have an attachment order over your wages for a debt that is included in your DRO, your creditor should tell your employer to stop making the deductions once they receive the report from the Official Assignee. If this does not happen you need to take a copy of your DRO acceptance letter to the District Court that made the order and ask them to cancel the order.
After your DRO application is accepted
Once your creditors have been notified of your Debt Repayment Order (DRO), some details of your file will be available on this website. You can log in to see your file and track the progress of your DRO, like how much you have paid so far.
- If you applied for your DRO online, you can use the same details to log in and look up your file.
- If you applied manually, you should have received an activation code or link with the written confirmation of your DRO acceptance. You can use this activation code to activate your account on the website.
- Once you’ve logged in, scroll to top of page and click on DRO Register(external link) in the header of website.
- Enter your estate number or your name, and click Search.
- Click on your name when it appears in blue - this will show you basic information about your file. This information is also available to the general public.
- View extra information about your file by clicking on the More info tab at the top of the page.
Once you agree to a DRO, you have to meet its conditions.
If your circumstances change you may need to change the DRO — this is called a variation. You, your creditors or your Supervisor can apply for a variation. Your application must clearly explain what changes you want and why, and be sent to the Official Assignee by email or post.
If the change might be negative for your creditors, e.g. increasing the time or reducing the amount they would get, your Supervisor will contact them, and they'll have 10 working days to object. The Official Assignee will make the final decision.