Most people searching for a debt solution are not choosing between abstract options — they are trying to find the approach that fits their specific situation: how much debt they have, whether they own a home, how much spare income they have each month, and whether creditor pressure is already escalating.
This hub maps the main UK debt solutions and the situations each one suits. The starting point for almost everyone is the same: get free advice first before choosing a formal route. This hub connects PocketWise’s full debt-solutions cluster.
Debt Solutions at a Glance — 2026
| Solution | Application fee | How long | Debt written off? | Best for |
|---|---|---|---|---|
| Breathing Space | Free | 60 days | No — pauses action only | Time to get advice while under creditor pressure |
| Debt Management Plan (DMP) | Free (via charity) | Until debts repaid | No | Some surplus income, want to repay in full |
| Individual Voluntary Arrangement (IVA) | Paid from arrangement | 5–6 years | Yes — remaining balance | Regular income, assets to protect, £10k+ debt |
| Debt Relief Order (DRO) | £90 | 12 months | Yes — all qualifying debt | Low income, assets under £2,000, debts under £30,000 |
| Bankruptcy | £680 | Usually 12 months | Yes — most unsecured debt | All other options exhausted, no assets to protect |
Choosing the Right Debt Solution — Decision Tree
Before selecting a formal route, work through these questions:
| Question | If yes | If no |
|---|---|---|
| Do you have any surplus income after essential expenses? | Consider DMP or IVA | Consider DRO or bankruptcy |
| Are your debts under £30,000 and assets under £2,000? | DRO may be best | Look at IVA or bankruptcy |
| Do you own a home with equity? | IVA protects it better than bankruptcy | Bankruptcy may be simpler |
| Are creditors contacting you relentlessly right now? | Breathing Space is the first step | Proceed to longer-term solution |
| Can you commit to 5 years of reduced payments? | IVA is viable | Consider bankruptcy for faster resolution |
Start Here — Triage Before Formal Solutions
For most people, the right first step is triage, not a formal debt solution:
- Identify priority debts — council tax, rent/mortgage arrears, utility arrears, and court fines must be paid before unsecured debts like credit cards and loans
- Stop avoidable escalation — contact creditors early and honestly; many will pause enforcement during debt advice
- Get free advice — StepChange, National Debtline, or Citizens Advice before signing anything
- Apply for Breathing Space if under active creditor pressure — 60 days of legal protection to get advice without the noise
Worked Example — Choosing Between IVA and Bankruptcy
Scenario: Karen has £35,000 in unsecured debt (credit cards and loans), earns £2,400/month, and pays £900/month rent. She has no assets.
| Factor | IVA | Bankruptcy |
|---|---|---|
| Monthly payment | ~£150–£200/month disposable income committed | Nothing committed monthly |
| Duration | 5–6 years | 12 months |
| Credit file impact | Severe, 6 years | Severe, 6 years |
| Debt written off | Yes — remaining balance after 5 years | Yes — most unsecured debt |
| Employment restrictions | Some professions restrict IVA holders | More professions restrict bankrupts |
On Karen’s numbers, she has approximately £200/month disposable income after rent and essential costs — enough for an IVA. The IVA route makes more sense here because it resolves the debt in a structured way and, with no assets to protect from bankruptcy, offers broadly similar outcomes for her with fewer professional restrictions.
However: if Karen’s surplus income dropped below £100/month, or if she did not qualify for an IVA, a DRO (if debts were under £30,000) or bankruptcy would become the better option.
Debt Management Plan — When It Works
A DMP is the simplest starting point if you have some surplus income and your debts are unaffordable at current repayment rates:
- You make one monthly payment to a debt charity (e.g. StepChange), which distributes it to creditors
- Creditors are not legally obliged to accept, but most do
- Interest may be frozen by creditors — though this is not guaranteed
- Credit file is marked for 6 years
- No fees if using a free debt charity
DMP is not appropriate if: your debts are so large that repaying them in full over any realistic period is impossible. In that case, a DRO, IVA, or bankruptcy is more appropriate.
DRO — Eligibility Requirements
A Debt Relief Order is often the best available solution for people with low income and minimal assets:
| DRO criteria | Threshold (England and Wales) |
|---|---|
| Total qualifying debt | £30,000 or under |
| Gross assets | £2,000 or under (car up to £4,000 excluded) |
| Monthly surplus income | £75 or under after essential expenses |
| Previous DRO | None in last 6 years |
| Application fee | £90 (fee waiver not available) |
If you qualify, a DRO writes off all qualifying debts after 12 months if your financial position has not materially improved. It is administered by an Official Receiver and cannot be arranged without an authorised debt advice intermediary.
Bankruptcy — Costs and What It Involves
Bankruptcy is sometimes treated as a last resort, but for people with no assets and overwhelming debt, it is often the cleanest exit:
| Bankruptcy fact | Detail |
|---|---|
| Application fee | £680 (paid to the Insolvency Service) |
| Duration | Usually 12 months — then discharge |
| Asset risk | Equity in property, savings, and non-essential assets may be claimed |
| Income payments agreement | If you have surplus income above a threshold, you pay for 3 years |
| Credit file | Marked for 6 years |
| Professional restrictions | Some professions (e.g. solicitors, certain financial roles) restrict or exclude bankrupts |
Scotland-Specific Debt Solutions
Scotland has a separate legal framework for insolvency. The equivalents to English solutions are different in name, structure, and eligibility:
| Scottish solution | English equivalent | Key difference |
|---|---|---|
| Sequestration | Bankruptcy | Scotland’s form of personal insolvency; administered by the Accountant in Bankruptcy |
| Protected Trust Deed | IVA | Binding on creditors once 67% by value agree; typically 4 years rather than 5–6 |
| Debt Arrangement Scheme (DAS) | DMP (but statutory) | Legally binding on creditors — they must freeze interest; structured repayment programme |
| Minimal Asset Process (MAP) | DRO | Scotland’s equivalent; debt threshold £25,000; assets under £2,000; fee £90 |
Breathing Space: Available in England and Wales only. Scotland does not have a direct equivalent, but the DAS application process provides some creditor protection while being assessed.
If you live in Scotland, take advice from a firm or charity that specifically knows Scottish insolvency law. Some English-focused debt advice services do not cover Scottish solutions. Money Adviser Scotland (moneyadvicescotland.org.uk / 0800 085 7145) is the national free debt advice service for Scotland.
Free Debt Advice — Where to Go
| Organisation | Contact | What they offer |
|---|---|---|
| StepChange Debt Charity | stepchange.org / 0800 138 1111 | Full advice, DMP setup, IVA referral |
| National Debtline | nationaldebtline.org / 0808 808 4000 | Telephone and online advice |
| Citizens Advice | citizensadvice.org.uk | General guidance, local support |
| Debt advice through GP | GP referral to mental health debt support | For mental health Breathing Space |
Never pay for debt advice. Fee-charging debt management companies are not required and can absorb part of your monthly payment in fees. Always start with a free charity service.
Related Hubs
- Loans and Borrowing hub — if the issue is current borrowing decisions
- Credit Scores hub — rebuilding credit after debt problems
- Benefits support hub — low-income support that may change the picture
The Debt Solutions Cluster
- Complete Guide to Managing Debt in the UK
- How to Get Out of Debt UK
- Free Debt Advice UK
- Debt Management Plan Guide UK
- Breathing Space Debt Respite Scheme UK
- IVA Guide UK
- Debt Relief Order (DRO) Guide
- Bankruptcy Guide UK
- IVA vs Bankruptcy UK
- How to Write Off Debt UK
- Debt Consolidation Guide UK
- Priority vs Non-Priority Debts UK
- Statute Barred Debt UK
- Debt and Mental Health
- Bailiffs: Your Rights Guide
- Can Bailiffs Force Entry? Your Rights Explained
- County Court Judgment (CCJ) Guide
- How to Get a CCJ Removed
- Council Tax Debt Guide
- Debt Collectors: Your Rights UK
- Debt Repayment Strategies UK
- Debt Payoff Calculator
- Gambling Debt Help UK
- Rent Arrears: Your Rights Guide
- Protected Trust Deed Guide Scotland
- Sequestration in Scotland
- Minimal Asset Process (MAP) Scotland
- Administration Order Guide UK
- Creditor Harassment: Your Rights UK
- What Happens to Debt When You Die?
- What Happens If You’re Made Bankrupt?
- Debt Snowball vs Debt Avalanche
- Can’t Pay My Credit Card Bill — What to Do