Compare All Debt Solutions - Complete Comparison

Compare All UK Debt Solutions

Choose the right debt solution by comparing all available options side-by-side. This comprehensive table covers formal insolvency procedures, informal arrangements, and government schemes.

How to use this guide: Review the comparison table below to understand the key differences between solutions. Then use the detailed breakdowns to see which best fits your situation.

Complete Comparison Table

Feature IVA DMP DRO Bankruptcy Admin Order
Legal Status Legally binding Informal Legally binding Legally binding Court order
Debt Write-Off Yes (60-70%) No (pay 100%) Yes (100% after 12 months) Yes (most debt) No (pay 100%)
Minimum Debt £6,000+ Any None Any £5,000
Maximum Debt No limit No limit £30,000 No limit £5,000
Duration 5-6 years Until paid off 12 months 12 months 3+ years
Monthly Payments Yes (£80-100+) Yes (variable) No Yes (if surplus income) Yes
Cost/Fees £5,000-£8,000 £0-£2,100 £90 £680 £50 + 10% fee
Home Protection Usually yes Yes N/A (can't own) Usually lost Yes
Asset Protection Mostly yes Yes Limited (under £2k) No (sold) Yes
Credit Impact 6 years While active + 6 6 years 6 years 6 years
Public Record Yes (online) No Yes (online) Yes (Gazette) No
Interest Frozen Yes (by law) If creditors agree Yes (by law) Yes (by law) Yes (by law)
Creditor Approval 75% required Voluntary Not required Not required Court decides
Legal Protection Yes (full) No Yes (full) Yes (full) Yes (full)
Can Cancel Difficult Anytime No No Difficult
Employment Impact Some jobs Minimal Some jobs Many jobs Minimal

Detailed Solution Breakdowns

1. Individual Voluntary Arrangement (IVA)

What it is: Formal legally binding agreement to pay reduced monthly payments for 5-6 years, then remaining debt written off.

Best for:

  • Debts of £6,000+
  • Regular income
  • Want debt write-off
  • Need creditor protection
  • Homeowners wanting to protect property

Eligibility:

  • ✅ Minimum £6,000 debt
  • ✅ Afford £80-100+ monthly
  • ✅ Regular income
  • ✅ 2+ creditors
  • ✅ England, Wales, or NI resident

Advantages:

  • ✅ 60-70% debt written off
  • ✅ Legal creditor protection
  • ✅ Interest frozen by law
  • ✅ Keep home (usually)
  • ✅ Fixed 5-6 year term
  • ✅ One monthly payment

Disadvantages:

  • ❌ High fees (£5,000-£8,000)
  • ❌ Credit damaged 6 years
  • ❌ Inflexible agreement
  • ❌ Public record (Insolvency Register)
  • ❌ May need equity release
  • ❌ Annual reviews

Typical cost: £150-£250/month for 60 months

Full IVA Details →

2. Debt Management Plan (DMP)

What it is: Informal arrangement to repay full debt through reduced monthly payments based on affordability.

Best for:

  • Any debt amount
  • Want to repay in full
  • Need flexibility
  • Temporary financial difficulty
  • Want free solution

Eligibility:

  • ✅ Any debt amount
  • ✅ Some disposable income
  • ✅ Creditors willing to cooperate
  • ✅ Want informal solution

Advantages:

  • ✅ Often free (via charities)
  • ✅ Very flexible
  • ✅ No minimum debt
  • ✅ Not public record
  • ✅ Can cancel anytime
  • ✅ Can pay off early

Disadvantages:

  • ❌ No debt write-off
  • ❌ No legal protection
  • ❌ Interest freeze optional
  • ❌ Creditors can withdraw
  • ❌ Can still be sued
  • ❌ Potentially very long duration

Typical duration: 5-15+ years (until paid in full)

DMP vs IVA Comparison →

3. Debt Relief Order (DRO)

What it is: Formal insolvency procedure for people with low income, minimal assets, and debts under £30,000. Debts written off after 12 months.

Best for:

  • Debts under £30,000
  • Very low income (under £75 disposable)
  • Minimal assets (under £2,000)
  • Cannot afford IVA payments
  • Renters or non-homeowners

Eligibility:

  • ✅ Debts under £30,000
  • ✅ Disposable income under £75/month
  • ✅ Assets under £2,000
  • ✅ Vehicle under £2,000
  • ✅ England, Wales, or NI resident
  • ✅ No DRO in last 6 years

Advantages:

  • ✅ Only £90 cost
  • ✅ All debt written off
  • ✅ Only 12 months
  • ✅ No monthly payments
  • ✅ Legal protection
  • ✅ Quick process

Disadvantages:

  • ❌ Very strict criteria
  • ❌ £30,000 debt limit
  • ❌ Asset restrictions
  • ❌ Income restrictions
  • ❌ Can't be homeowner (effectively)
  • ❌ Credit damaged 6 years

Typical cost: £90 one-time fee

DRO vs IVA Comparison →

4. Bankruptcy

What it is: Formal insolvency procedure that writes off most debts but typically requires sale of assets. Discharged after 12 months.

Best for:

  • Large debts with no way to repay
  • No significant assets
  • Cannot afford IVA/DMP
  • Need fresh start
  • Over £30,000 debt (can't get DRO)

Eligibility:

  • ✅ Any debt amount
  • ✅ Unable to pay debts
  • ✅ England, Wales, or NI resident

Advantages:

  • ✅ Most debts written off
  • ✅ Only 12 months (usually)
  • ✅ Legal protection
  • ✅ Fresh financial start
  • ✅ No creditor approval needed
  • ✅ Quick process

Disadvantages:

  • ❌ Home usually sold
  • ❌ Assets sold
  • ❌ £680 upfront cost
  • ❌ Serious employment restrictions
  • ❌ Public notice (Gazette)
  • ❌ Very severe stigma
  • ❌ Credit damaged 6 years

Typical cost: £680 upfront fee + asset loss

Bankruptcy vs IVA Comparison →

5. Administration Order

What it is: County court order to repay debts through one monthly payment. Available for smaller debts with at least one court judgment.

Best for:

  • Debts £5,000 or less
  • At least one CCJ
  • Want court protection
  • Need structured repayment

Eligibility:

  • ✅ Debts up to £5,000
  • ✅ At least one CCJ or court judgment
  • ✅ Affordable monthly payment
  • ✅ England, Wales, or NI resident

Advantages:

  • ✅ Legal protection
  • ✅ Interest frozen by law
  • ✅ One monthly payment
  • ✅ Court supervised
  • ✅ Keep assets
  • ✅ Low cost (£50 + 10% fee)

Disadvantages:

  • ❌ Very low debt limit (£5,000)
  • ❌ Need existing CCJ
  • ❌ No debt write-off
  • ❌ Must pay in full
  • ❌ Rarely available
  • ❌ Credit still damaged

Typical duration: 3+ years

Note: Very rarely used today due to strict limits. Most people choose DMP or IVA instead.

6. Informal Options

Negotiate with Creditors Directly

What it is: Contact creditors yourself to arrange reduced payments, payment holidays, or debt settlement.

Best for:

  • Temporary financial difficulty
  • Cooperative creditors
  • Small number of creditors
  • Want no formal arrangement

Advantages:

  • ✅ Free
  • ✅ Very flexible
  • ✅ No third party
  • ✅ Can negotiate partial settlement

Disadvantages:

  • ❌ No legal protection
  • ❌ No guarantee creditors cooperate
  • ❌ Still damages credit if miss payments
  • ❌ Time-consuming

Full & Final Settlement

What it is: Offer lump sum (typically 30-50% of debt) to creditors to settle in full.

Best for:

  • Have lump sum available
  • Want to avoid formal insolvency
  • Small number of creditors
  • Want quick resolution

Advantages:

  • ✅ Debt written off (partial)
  • ✅ Avoids insolvency
  • ✅ Quick resolution
  • ✅ Creditors often accept

Disadvantages:

  • ❌ Need substantial lump sum
  • ❌ No guarantee creditors accept
  • ❌ Damages credit (settled accounts)
  • ❌ May have tax implications

Solution Comparison by Situation

Situation 1: Low Debt, Low Income, No Assets

Profile: £8,000 debt, £800/month income, £20 disposable, renting, no car

Best option: Debt Relief Order (DRO) ✅

  • Cost: £90
  • Duration: 12 months
  • Outcome: All debt written off

Alternative: Informal negotiations

Situation 2: Medium Debt, Regular Income, Homeowner

Profile: £22,000 debt, £1,800/month income, £180 disposable, homeowner (£30k equity)

Best option: Individual Voluntary Arrangement (IVA) ✅

  • Cost: £10,800 total payments (inc. fees)
  • Duration: 60 months
  • Outcome: ~£11,200 debt written off, home protected

Alternative: DMP if want to repay in full

Situation 3: Large Debt, No Income, Significant Assets

Profile: £50,000 debt, unemployed, homeowner (£100k equity)

Best option: Bankruptcy ⚠️

  • Cost: £680 + loss of home equity
  • Duration: 12 months
  • Outcome: Debts written off, home sold

Alternative: Sell home voluntarily, settle debts, avoid bankruptcy

Situation 4: Small Debt, Temporary Issue, Good Income

Profile: £5,000 debt, usually £2,000/month (currently £1,400 due to short-term issue)

Best option: Debt Management Plan (DMP) or negotiate directly ✅

  • Cost: Free
  • Duration: 6-18 months
  • Outcome: Repay in full, can increase payments when income recovers

Alternative: Payment holiday from creditors

Situation 5: Medium Debt, Want Flexibility, Cooperative Creditors

Profile: £15,000 debt, £1,500/month income, £150 disposable, expect pay rise soon

Best option: Debt Management Plan (DMP) ✅

  • Cost: Free (use charity)
  • Duration: Variable (can pay off early)
  • Outcome: Repay in full, flexible

Alternative: IVA if creditors not cooperating

Decision Flowchart

START
  ↓
Can you afford £80-100+ monthly?
  ├─ NO → Debt under £30,000?
  │         ├─ YES → Assets under £2,000?
  │         │          ├─ YES → Disposable income under £75/month?
  │         │          │          ├─ YES → DRO ✅
  │         │          │          └─ NO → Bankruptcy or negotiate
  │         │          └─ NO → Bankruptcy or asset sale
  │         └─ NO → Bankruptcy
  │
  └─ YES → Want debt write-off?
            ├─ YES → Debt £6,000+?
            │          ├─ YES → IVA ✅
            │          └─ NO → Save until qualify for IVA or use DMP
            │
            └─ NO → Want flexibility?
                      ├─ YES → DMP ✅
                      └─ NO → IVA (more structured)

Key Comparison Points

Debt Write-Off Amounts

  • DRO: 100% written off ⭐⭐⭐⭐⭐
  • Bankruptcy: 100% written off ⭐⭐⭐⭐⭐
  • IVA: 60-70% written off ⭐⭐⭐⭐
  • DMP: 0% written off ⭐
  • Admin Order: 0% written off ⭐

Speed of Resolution

  • DRO: 12 months ⭐⭐⭐⭐⭐
  • Bankruptcy: 12 months ⭐⭐⭐⭐⭐
  • IVA: 5-6 years ⭐⭐⭐
  • DMP: 5-15+ years ⭐
  • Admin Order: 3+ years ⭐⭐

Asset Protection

  • DMP: Full protection ⭐⭐⭐⭐⭐
  • IVA: Good protection ⭐⭐⭐⭐
  • Admin Order: Full protection ⭐⭐⭐⭐⭐
  • DRO: Limited (can't have much) ⭐⭐
  • Bankruptcy: No protection ⭐

Cost

  • DMP: Free ⭐⭐⭐⭐⭐
  • DRO: £90 ⭐⭐⭐⭐⭐
  • Admin Order: £50 + 10% ⭐⭐⭐⭐
  • Bankruptcy: £680 ⭐⭐⭐
  • IVA: £5,000-£8,000 ⭐

Flexibility

  • DMP: Very flexible ⭐⭐⭐⭐⭐
  • Negotiate: Very flexible ⭐⭐⭐⭐⭐
  • IVA: Inflexible ⭐⭐
  • DRO: Inflexible ⭐
  • Bankruptcy: Inflexible ⭐

Common Questions

Q: Which debt solution is best?
A: Depends entirely on your circumstances. Use the flowchart above or try our Debt Solution Comparator.

Q: Can I choose any solution?
A: No. Each has specific eligibility criteria. Most people qualify for DMP or IVA, but DRO has very strict limits.

Q: Which solution damages credit least?
A: All damage credit similarly (6 years). DMPs may show as "arrangement to pay" rather than "insolvency" but impact is similar.

Q: Can I have two solutions at once?
A: No. You choose one solution for all qualifying debts.

Q: What if I don't qualify for any solution?
A: Everyone qualifies for at least DMP (informal) or bankruptcy. Speak to debt advisors to explore options.

Q: Should I pay for debt advice?
A: No. Free debt advice is available from StepChange, National Debtline, Citizens Advice, and others. Never pay upfront for debt help.

Next Steps

1. Assess Your Situation

Use our tools to understand your options:

2. Get Free Advice

Contact debt charities:

  • StepChange: 0800 138 1111
  • National Debtline: 0808 808 4000
  • Citizens Advice: Find local bureau
  • PayPlan: 0800 280 2816

3. Explore Specific Solutions

Learn more about each option:

Remember: Every situation is unique. What works for someone else may not suit you. Take time to understand all options and get professional advice before deciding.

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