Compare repayment plans and formal debt solutions, including eligibility, fees, credit impact and risks to assets.
MoneyNerd provides general information. We do not provide debt advice, assess which debt solution is suitable for you or recommend one. Availability and suitability depend on your circumstances and where you live.
A debt adviser can explain the costs, risks and alternatives before you decide. Find free debt advice through MoneyHelper.
Compare the main debt options
There is no single best debt solution. The right approach depends on where you live, the debts you owe, what you can afford after essential living costs, and any property or other assets you own. Read the benefits and drawbacks together; this guide cannot establish which option is suitable for you.
Deal with urgent and priority debts first. Rent or mortgage arrears, Council Tax or rates, energy arrears and court fines can have more serious consequences than credit cards or unsecured loans. Get prompt debt advice if you face eviction, disconnection or enforcement, and keep paying ongoing essential bills. Citizens Advice explains priority debts.
Debt Management Plan (DMP)
Where and how it works: Available across the UK. A DMP is an informal arrangement to repay non-priority debts, such as credit cards and unsecured loans, through one affordable payment. It normally aims to repay the debt in full.
Pros
- One payment can make budgeting easier, and the provider deals with creditors.
- Payments can be reviewed if your circumstances change; you can leave the plan.
- Free providers are available, so you do not have to pay a management fee.
Cons
- Creditors do not have to accept the offer or freeze interest and charges. They can still contact you or take court action.
- Reduced payments can damage your credit record. A DMP does not normally write off debt.
- Repayment can take many years; fees, if charged, leave less money for your debts. Priority bills and arrears need separate arrangements.
Time and cost: No fixed length; it depends on your debt, payments and interest. Compare a free plan with any fee-paying offer. Read our DMP guide and MoneyHelper’s explanation.
Debt Relief Order (DRO)
Where and eligibility: England, Wales and Northern Ireland, with separate application rules. In England and Wales, the main limits are no more than £50,000 of qualifying debt, £75 monthly disposable income and £2,000 of countable assets, with a permitted vehicle worth up to £4,000. You cannot own your home. Residence, previous insolvency and other conditions also apply; an approved adviser checks eligibility.
Pros
- No application fee and normally no payments towards included debts during the usual 12-month period.
- Included qualifying debts are normally written off at the end if the conditions remain satisfied.
- Protection from most recovery action on included debts.
Cons
- Strict income and asset limits, borrowing restrictions, a public insolvency entry and a six-year credit record impact.
- Some debts are excluded. Ongoing bills remain payable, and rent arrears can still put your tenancy at risk.
- You must report relevant financial changes; a DRO can be cancelled if you no longer qualify. Statements and some other creditor contact can continue.
Time and cost: Usually 12 months; free to apply through an approved adviser. Check the England and Wales DRO guidance or Northern Ireland’s current rules. See our DRO and DMP comparison.
Individual Voluntary Arrangement (IVA)
Where and how it works: England, Wales and Northern Ireland, with different procedures. An insolvency practitioner proposes and supervises a binding arrangement. Creditors must approve it; affordable regular payments or a lump sum fund the agreement.
Pros
- Agreed payments and protection from recovery action by creditors bound by the IVA.
- Remaining included debt can be written off on successful completion.
Cons
- Fees are paid from the arrangement, leaving less for creditors. Payments are reviewed, and extra income, inheritances or other assets may increase what you must pay.
- A public insolvency entry, normally six years on your credit record, and restrictions under the agreement. Some debts are excluded.
- If it fails, creditors may pursue outstanding debts and add back previously frozen interest and charges. Bankruptcy may follow, and payments already made are not normally refunded.
Time, cost and your home: Monthly-payment IVAs commonly last five or six years; lump-sum and other arrangements differ. Ask for the full fee breakdown. Under the 2025 protocol for England and Wales, you do not have to sell your home or release its equity, but its assessed equity can mean six years of payments instead of five. Older, bespoke and Northern Ireland arrangements may differ. Check the actual proposal and read our IVA guide.
Bankruptcy in England, Wales and Northern Ireland
How it works: A formal insolvency process for people unable to pay their debts. A trustee deals with assets and any required contributions. Scotland’s process is explained separately below.
Pros
- Most qualifying debts are released on discharge, without having to repay everything.
- Included unsecured creditors normally deal with the bankruptcy process rather than pursuing you individually.
Cons
- Your home, savings and other valuable assets may be sold. Bankruptcy can affect your job, business, bank account and access to credit.
- Public records and restrictions apply; the credit entry normally lasts six years.
- Some debts remain payable, and affordable income payments can continue after discharge. Assets already in the bankruptcy can still be dealt with afterwards.
Time and cost: In England and Wales, applying costs £680. Discharge is usually after 12 months, but income payments can last up to three years. Northern Ireland has its own court process and fees. Read our bankruptcy guide.
Debt Arrangement Scheme (DAS)
Where and how it works: Scotland only. A DAS-approved money adviser applies for a Debt Payment Programme (DPP), normally to repay included debts in full through affordable instalments.
Pros
- Relevant interest and charges are frozen and written off when you complete the programme.
- Protection against specified creditor enforcement while the programme operates.
- DAS does not require you to sell your home or other assets. There is no fee to set up a DPP.
Cons
- You need enough disposable income to repay within a reasonable period; it can take many years.
- A public DAS register entry and an impact on access to credit.
- If the DPP is revoked, enforcement can resume and interest and charges may become payable. Housing arrears can still put your home at risk.
Time and cost: No standard duration; the payment and debt level determine the term. Creditors cover the scheme’s administration costs. Ongoing bills remain payable, and administrative creditor contact can continue. See our DAS guide and Scottish Government guidance.
Protected trust deed
Where and eligibility: Scotland only. You must owe at least £5,000. An insolvency practitioner acts as trustee and checks whether your proposed contributions and assets can support the arrangement. A trust deed must gain protected status for the relevant protection against creditors; creditors can object.
Pros
- Payments based on affordability and protection from creditors bound by a protected deed.
- Remaining included debts can be written off if you meet the terms and obtain discharge.
Cons
- Your home equity and other assets may have to be contributed or realised.
- Trustee fees reduce the amount paid to creditors. Some debts are excluded.
- A public insolvency entry, normally six years of credit impact and possible employment consequences.
- Protection is not automatic. Failure can leave debts outstanding and lead to bankruptcy.
Time and cost: Income contributions normally last at least four years. Get written details of fees and how your assets will be treated. Read the Scottish Government trust deed guide and our guide to trust deeds and car finance.
Scottish bankruptcy: sequestration and MAP
Where and how it works: Scotland. Bankruptcy is called sequestration. The Minimal Asset Process (MAP) is a route for eligible people with no assessed disposable income available for debt repayments, few assets and debts of no more than £25,000. You cannot own land or a home under MAP; other eligibility rules apply.
Pros
- Qualifying debts can be discharged without full repayment.
- MAP has no application fee and a shorter usual discharge period.
Cons
- Full bankruptcy can put your home and other assets at risk and require income contributions.
- Both routes have public-register, credit, borrowing and possible employment consequences; some debts are not discharged.
Time and cost: MAP discharge is normally after six months. Full bankruptcy discharge is usually after one year, but contributions normally last four years. The full-bankruptcy application fee is up to £150, with exemptions. Discharge does not mean all asset issues are finished. Ask a Scottish money adviser to compare the routes using the Scottish bankruptcy guidance.
Debt consolidation
Where and how it works: Available across the UK, subject to a lender’s checks. New borrowing pays off existing debts. You still owe the new loan; consolidation does not write debt off.
Pros
- One repayment can be easier to manage.
- A lower rate may reduce the total cost if fees and the repayment term do not outweigh the saving.
Cons
- A smaller monthly payment can cost more overall if you repay for longer. Include arrangement fees and early-repayment charges when comparing.
- A poor credit history may mean rejection or an expensive rate. Reusing cleared credit cards can increase your debt again.
- If the loan is secured on your home and you cannot repay, you could lose your home. Missed payments also affect your credit record.
Time and cost: Set by the loan agreement. Compare the total amount repayable as well as the monthly payment. Read our debt consolidation guide and MoneyHelper’s guidance.
Temporary protection and other alternatives
Breathing Space in England and Wales: A debt adviser can arrange up to 60 days of protection from most enforcement, interest and charges on qualifying debts while you work on a plan. The mental health crisis version covers qualifying crisis treatment plus 30 days. It does not write off debt or create a payment holiday; ongoing bills and payment obligations remain. Read the Breathing Space rules.
A Scottish moratorium: This can give six months of protection from certain enforcement while you consider a solution. It does not itself freeze interest or write off debt, and not all existing action stops. A money adviser can explain the moratorium rules.
Informal repayment offers or settlements: You may be able to agree reduced payments or offer a lump sum in full and final settlement. Creditors do not have to agree, interest may continue and your credit record can be affected. Get any settlement and treatment of the remaining balance confirmed in writing before paying. Citizens Advice explains repayment offers; National Debtline explains settlements.
Administration orders in England and Wales: These court-managed payments may be available if you have a County Court or High Court judgment, at least two creditors, total debts of £5,000 or less and money for regular payments. Included creditors need the court’s permission to take further action. There is no application fee, but the court deducts a fee from payments. Credit records are affected and missed payments can lead to cancellation. Check the court’s eligibility and fee guidance and GOV.UK overview.
What to check before choosing
- Which debts are covered? Secured borrowing, student loans, court fines and maintenance can be treated differently or excluded. Ask for a debt-by-debt check. A write-off for you does not normally release a joint borrower or guarantor.
- What happens to your home, car and job? Protection from unsecured creditors does not automatically prevent repossession or eviction. Check tenancy, employment and professional restrictions before entering insolvency.
- What will you pay in total? Ask about fees, annual reviews, extra income, windfalls and what happens if payments become unaffordable. Free advice does not mean every solution is free.
- What happens if the solution fails? Ask what debt and interest could remain, whether fees are refundable and what alternatives would then be available.
Public-register entries and credit-file entries are different records with different removal rules. A solution ending does not mean your credit record immediately recovers.
A free, impartial debt adviser can check your budget, benefit entitlement and all available options before you commit.
Information checked against the linked official and debt-advice sources on 26 October 2026. Eligibility, fees and rules can change.
What happens if you request an introduction
MoneyNerd does not provide debt advice, assess whether a debt solution is suitable for you or recommend one.
If you complete our form and agree to an introduction, we may share your details with The Debt Advice Service, a trading style of Pacific Financial Solutions Limited. If your enquiry is passed on, its team may contact you to understand your circumstances and discuss the options available. Completing our form does not mean you qualify for a particular debt solution.
Using MoneyNerd and making a debt enquiry are free. Advice from The Debt Advice Service is free and there is no obligation to proceed. Fees apply to some debt solutions, and your credit rating may be affected.
A debt solution may be administered by another provider or an insolvency practitioner. Ask who would provide it and what fees and terms would apply before agreeing.
MoneyNerd Limited may receive a payment from The Debt Advice Service if someone we introduce goes on to enter an IVA or debt management plan. The amount can differ between solutions. MoneyNerd does not make the recommendation.
MoneyNerd Limited (FRN 978681) is an Introducer Appointed Representative of Pacific Financial Solutions Limited (FRN 688034), trading as The Debt Advice Service, which is authorised and regulated by the Financial Conduct Authority.
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