Some 3,436 DROs were recorded by the Insolvency Service in April, marking a record high in the statistics going back to when DROs were introduced in 2009.
The jump coincided with the removal of a £90 administration fee to obtain a DRO from April 6 2024, the service said.
Changes to DROs were announced in the 2024 spring Budget, with the fee having been seen as a barrier to some people dealing with their debts.
Other changes to DROs, which will come into force in June, include raising the total amount of debt covered from £30,000 to £50,000 and increasing the value of the vehicle a person can own when they enter a DRO from £2,000 to £4,000.
The rises in the debt threshold and the value of a vehicle come into force on June 28 2024.
In total, 9,651 people entered formal personal insolvency in England and Wales in April, marking a 10% increase compared with the same month a year earlier.
As well as DROs, the total is also made up of bankruptcies and individual voluntary arrangements (IVAs).
Some 648 bankruptcies were recorded, along with 5,567 IVAs.
The number of IVAs registered in April was similar to numbers seen over the past 12 months, the report said.
The number of bankruptcies was similar to the past nine months and slightly higher than in April 2023. However, bankruptcy numbers remained at about half of pre-2020 levels, the service added.
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There were 7,649 breathing space registrations in April 2024. This is 16% higher than in April 2023.
The breathing space scheme offers a break from the build-up of interest and other fees and puts a pause on contact and enforcement action by creditors.
Of the breathing space registrations, 7,547 were standard breathing space registrations and 102 were mental health breathing space registrations.
The cost-of-living crisis is still taking a toll on people’s finances
Tim Cooper, R3
Tim Cooper, president of insolvency and restructuring trade body R3 said: “It’s clear that a significant number of people are in need of either debt advice, or debt solutions.
“Based on the figures, it seems the majority of these people are choosing to either seek protection from creditor action while they explore their options, or enter processes that enable them to come to an arrangement with their creditors when it comes to repaying their debts.
“It’s also very clear the cost-of-living crisis is still taking a toll on people’s finances. Prices are continuing to rise despite the fall in inflation, and we’re hearing reports of people turning to credit to bridge the gaps in their finances. Despite these issues, the mood among consumers is becoming more positive.”
