Debt Solutions

The following information is provided in respect of the key debt solutions in England and Wales. If you are seeking information regarding debts solutions available in Scotland or Northern Ireland, please contact our sister company The Debt Advice Service on 0800 254 5112 or visit

It is important to understand at this stage that unsecured debts typically fall into 2 categories, these are “Provable” and “Non-Provable” debts.  Provable debts are amounts owed for things like credit cards, loans, catalogues, store cards, unpaid bills etc and will usually be included in any debt solution. However, non-provable debts include criminal fines, confiscation / restitution orders, family proceedings, court orders, Student loans, Social Fund loans and child support obligations. These Non-provable debts would remain payable even after a complete Bankruptcy process, so they would not typically be included in any other debt solution either, but where possible provisions would be made within your expenditures to pay these debts outside of your chosen debt solution.

Whilst we are confident the information contained on this website is accurate, we always recommend that you satisfy yourself that any information you have received from us or any other source is full and complete before making the decision to proceed with any debt resolution option. To do this you should consider fact checking and reviewing information available from other free and reputable sources such as which is a government website provided by The Money and Pension Service.

What debt solutions are available?


An IVA is a legally binding agreement between you and your provable creditors whereby you agree to make affordable payments over a set period.  This is usually 5 years or possibly 6 years if you own a property and cannot release equity. However, depending on your circumstances, it may also be possible to agree a shorter period based on a one-off lump sum payment or a payment from the future sale of a property etc.

Creditor support is needed for an IVA to be approved, but even if there are creditors who oppose it, the IVA it may still be approved and become legally binding if 75% in value of voting creditors support your Proposal.

Providing you make the agreed payments and comply with all other agreed terms, all interest and charges will be frozen, creditor recovery action will cease and any remaining balances for debts included in the IVA will be written off.

There is no set criteria to propose an IVA to your creditors but, unless there are exceptional circumstances, creditors are unlikely to accept an IVA if your debts are less than £6,000,  you only have 1 or 2 creditors or if creditors would receive more in an alternative debt solution (eg Bankruptcy or less than 10 years in a Debt Management Plan).

An IVA can only be set up with the assistance of a licensed Insolvency Practitioner (IP). If, after considering your debt options, you decide to proceed with an IVA proposal to your creditors via The Debt Resolution Service, our in-house Insolvency Practitioner Jason Bowen would Act as your Nominee to help you prepare and negotiate your IVA proposal with creditors. If the IVA is later approved by your creditors, Jason Bowen would also act as the Supervisor of the IVA.

All IVAs will incur fees but these are usually paid from your payments into the IVA and will be subject to the proposal terms and approval by creditors. Some companies may ask you to make a payment towards the IVA costs before any work is started. However, The Debt Resolution Service will not ask you to make any advance payment whatsoever towards any fees of the IVA. This means that if your IVA is rejected by creditors, you pay nothing towards IVA fees.

As a brief explanation of a successful IVA approval process, you and your chosen IVA firm will first discuss and put together an IVA proposal which will include your income and expenditure, list of creditors and terms & conditions of the agreement. Once signed by you, your proposal will be sent to creditors for consideration and a date for a Meeting of Creditors will be set for creditors to vote on your Proposal. In most cases this meeting will be a ‘Virtual Meeting’, meaning that no-one physically attends and all votes will be cast by email, post, fax etc.  If the required 75% of voting creditors accept your proposal, then the IVA will become legally binding.

Advantages of an IVA

  • One monthly repayment amount you can afford
  • Defined period / duration
  • Interest and charges frozen
  • Remaining IVA debts written off on completion
  • Legal protection from IVA creditor recovery action
  • Limited flexibility and option to renegotiate terms of the IVA
  • IVA firm deal with creditor contact and queries.


Disadvantages of an IVA

  • Cannot be changed or cancelled without formal processes
  • You cannot obtain further credit without permission of the IVA Supervisor
  • IVA recorded on a Public Insolvency Register and will remain on your Credit Report for 6 years
  • Property owners could be expected to release equity or extend the IVA.
  • Annual reviews of Income and Expenditure and must declare extra income or changes in circumstances 
  • Can affect certain jobs or career prospects
  • Failure to comply with the IVA terms could lead to bankruptcy.

Debt Management Plan- DMP

A Debt Management Plan (DMP) is an informal agreement between you and your creditors which is administered by a Debt Management provider. An ordinary DMP will usually mean that each creditor receives a proportionate share of the payments available to them and your debts will reduce equally until all creditors are repaid in full, making it fair to all creditors involved. As this is in informal agreement with no expected debt write off, non-provable debts may consider being part of the plan, but this cannot be guaranteed.

Whether any fees apply to your DMP will depend on which organisation or company you chose to start your plan. There are organizations such as Step Change Debt Charity who you can approach to administer a DMP free of charge, but these are limited and you will need to approach them first to determine whether they can take you onboard. Alternatively, you can approach an ordinary fee-charging company to administer your DMP. You will almost certainly be taken on board by one of these companies but due to their own fees and charges, the DMP duration will be extended because it will take you longer to repay your debts in full.

Whichever provider you chose, the provider will assess your financial position and agree an affordable payment with you which will then be presented to your creditors. As a DMP is an informal agreement, meaning that you can change or cancel your plan if your circumstances change for better or worse. But whilst most creditors will typically agree to the plan (or at least on a short term basis) there is no legal protection from creditors. This means that there is always a risk that creditors opt out of the plan, add interest and charges or continue to take recovery action against you.

Advantages of a Debt Management Plan

  • You make affordable payments with flexibility to change if your circumstances change
  • Interest and charges often suspended or frozen – but not guaranteed
  • Creditor contact and recovery action ceases in most cases
  • Plan completes when all creditors repaid in full

Disadvantages of a Debt Management Plan

  • No legally binding agreement and creditors may continue to contact you, add interest or take recovery action against you
  • Your credit rating will be impacted for six years or longer depending on the duration of the plan.
  • No debt write off so plans are often quite lengthy
  • Fees can extend the duration of the plan

Debt Relief Order – DRO

A DRO is a formal insolvency process which will include your provable unsecured debts, but it has strict qualifying criteria, so it may not be an available option for many people.

The main criteria for a DRO is as follows:-

  • Your surplus income must be less than £75 per month
  • You must not own or have any interest in a property
  • Your car/vehicle is worth less than £2,000
  • Your other personal assets must be worth less than £2,000
  • Your total debts are less than £30,000
  • You have not applied for a DRO in the last 6 years
  • You have lived in England or Wales within the last 3 years

(Please note: In Northern Ireland the criteria for a DRO is £50 disposable income, £1,000 Assets/Car and £20,000 debt level)

If you meet the qualifying criteria, you can apply for a DRO and the application must be submitted via an approved intermediary, which you can find at

If your DRO is granted, you will not be required to make any payments into the DRO and you will usually be freed from your provable unsecured debts after the ordinary “Discharge Period” of 12 months. However, if your circumstances improve during the 12 month period, or you fail to co-operate with the administrator the DRO can revoked.

Advantages of a DRO

  • Low application fee
  • No monthly payments
  • Interest and charges are frozen
  • Creditor contact and recovery action ceases
  • Typical discharged after a year (unless there are any complications or you fail to co-operate)
  • Provable debt written off on discharge

Disadvantages of a DRO

  • May be revoked if your circumstances improve or you fail to co-operate
  • Recorded on the public Insolvency Register and will remain on your Credit Report for 6 years
  • Can affect certain jobs or career prospects


Other than being unable to pay your debts of more than £750, Bankruptcy has no strict criteria or limitations regarding surplus income, debt level or asset values.

A creditor can petition for your bankruptcy or you can submit your own application online which currently costs a total of £680. Depending on your circumstances you may qualify for some assistance with these application fees and/or the fees can be paid in instalments, but the full amount needs to be paid before your application is processed.

A formal Bankruptcy Order will usually be made against you unless there are exceptional reasons for the Court to delay or dismiss it (eg there has been a mistake or a error in the process).

On the making of the Bankruptcy Order, a court appointed Insolvency Practitioner known as the Official Receiver (OR), will assess your situation and investigate the circumstances surrounding your insolvency. The OR may also become the Trustee of the Bankruptcy or appoint another Insolvency Practitioner to become the Trustee instead. The duty of the Trustee is to recover and realise your assets to pay the costs of the bankruptcy process and (if possible) to make a distribution to your creditors. This means that with the exception of your essential household items and a reasonably priced vehicle, any property or assets you own could be repossessed and sold. In addition, the Trustee will assess your income and expenditure and if you have any surplus income, the Trustee can apply for an Income payments Order requiring you to make regular payments into the Bankruptcy for up to 3 years. The Trustee will also have powers to look into previous transactions and in extreme circumstances could seek a court order to recover assets you have previously given away or sold cheaply, or recover sums you have paid to third parties or selected creditors before your Bankruptcy.

If there are no significant issues, Bankruptcy has an ordinary “Discharge Period” of 12 months, meaning that you will usually be freed from your provable unsecured debts 12 months after the Bankruptcy Order was made. However, this discharge period can be extended or postponed indefinitely if you do not co-operate with the OR / Trustee or, for example, if you have been dishonest in your financial dealings or you intentionally or recklessly caused your own insolvency. No matter when you receive your discharge from Bankruptcy, your obligation to co-operate with the OR and Trustee will continue after your discharge until the administration of your Bankruptcy is complete.

Advantages of Bankruptcy:

  • Interest and charges are frozen
  • Creditor contact and recovery action ceases
  • Typically discharged after 12 month (unless there are any complications or you fail to co-operate)
  • Provable debt written off on discharge
  • Monthly payments likely to be shorter period than DMP or IVA

Disadvantages of Bankruptcy:

  • Trustee can take action against your assets
  • Full investigation into your financial history and transactions
  • Recorded on the public Insolvency Register and will remain on your Credit Report for 6 years
  • You cannot act as a company director and you will need court permission to take any part of managing a limited company.
  • Can affect other jobs or career prospects

To find out more about managing your money and getting free debt advice, visit Money Helper, an independent service set up to help people manage their money. The Debt Resolution Service is not associated with Money Helper.