Your debt options in England and Wales

The main options at a glance

These are the options people ask about most. They are in no special order. None of them is the right one for everybody.

Individual Voluntary Arrangement (IVA)

An IVA is a legal agreement between you and the people you owe money to. You pay a licensed professional (an insolvency practitioner) each month. They share the money out between your creditors. A standard IVA usually lasts 5 years, or 6 years if your equity in your home is £10,000 or more. Fees are taken out of your payments. An IVA is one option, and it will not suit everyone.

Bankruptcy

Bankruptcy is a legal process for debts you cannot pay. It costs £680 to apply. It usually ends after 12 months. Your things can be sold to pay towards your debts. That can include your home.

Debt Relief Order (DRO)

A DRO is for people with lower debts and little to sell. There is no application fee. You must owe less than £50,000. It lasts 12 months. An approved debt adviser applies for you.

Debt Management Plan (DMP)

A DMP is an agreement between you and your creditors to pay your debts over time. You can set one up yourself or through a company. Some companies charge a set-up fee and a handling fee each time you pay. Your creditors do not have to agree. Unless the agreement says otherwise, they can still ask for the full amount later, and they can still take action to get their money. A DMP can only cover unsecured debts. These are debts that are not secured against your property. Read what GOV.UK says about Debt Management Plans.

Breathing Space

Breathing Space gives you up to 60 days of protection from your creditors while you get advice and make a plan. It is free to apply. It does not cancel your debts. A debt adviser applies for you.

Other options

GOV.UK also lists an administration order, for some smaller debts after a court judgment. You can sometimes reach an informal agreement with your creditors too. See the full GOV.UK list.

What they have in common

• They leave a mark on your record. A bankruptcy can stay on your credit file for 6 years. A DRO usually stays for 6 years. An IVA stays for 6 years from the day it starts.
• They have rules you must follow. For example, you may have to tell lenders about them when you borrow.
• They do not suit everyone. Each has limits on who can use it and what it covers.

Compare two options side by side

These pages use the same questions for each option, so you can see the differences. They do not pick a winner.

• IVA or bankruptcy?
• IVA or Debt Relief Order?

What this page cannot do

We do not ask about your money, and we cannot tell you which option fits you. That needs someone who can look at your whole situation. Free advisers do that without judging you.

These guides cover England and Wales. If you live in Scotland or Northern Ireland, the options and the rules are different. See our free help page for where to start.