Understanding Your Debt Solution Options
When you’re struggling with debt, it can be difficult to know which solution may be most appropriate for your circumstances. Different debt solutions are designed for different financial situations, and what works for one person may not be suitable for another.
At Debt Help Support, we help individuals explore available debt solutions through our trusted partner network. Below is an overview of some of the most common debt solutions available in the UK.
Complete our free assessment to find out which options may be available to you.
Individual Voluntary Arrangement (IVA)
What Is An IVA?
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors. It allows eligible individuals to repay a portion of their unsecured debt through affordable monthly payments over a fixed period, typically five to six years.
Once approved, creditors included within the arrangement are generally unable to take further legal action against you, provided you maintain the agreed payments.
Potential Benefits
✓ One affordable monthly payment
✓ Protection from creditor pressure
✓ Interest and charges may be frozen
✓ Remaining qualifying debt may be written off at the end of the arrangement
✓ Legally binding agreement
Things To Consider
- An IVA may affect your credit rating.
- Not everyone will qualify.
- You must maintain agreed payments.
- Homeowners may be required to address available equity depending on circumstances.
Who May Consider An IVA?
An IVA may be suitable for individuals with significant unsecured debt who have a regular income and can afford a monthly contribution towards their debts.
Debt Relief Order (DRO)
What Is A Debt Relief Order?
A Debt Relief Order (DRO) is a formal debt solution designed for individuals with low income, limited assets and relatively low levels of debt.
If approved, creditors included in the DRO cannot take action against you during the moratorium period. If your circumstances remain unchanged, qualifying debts may be written off at the end of the period.
Potential Benefits
✓ Qualifying debts may be written off
✓ Protection from creditor action
✓ No ongoing debt repayments in many cases
✓ Suitable for people with limited disposable income
✓ Fixed application fee
Things To Consider
- Eligibility requirements apply.
- Asset and income limits must be met.
- A DRO may affect your credit rating.
- Certain financial restrictions apply during the order period.
Who May Consider A DRO?
A DRO may be suitable for individuals with low income, minimal assets and limited ability to repay their debts.
Debt Management Plan (DMP)
What Is A Debt Management Plan?
A Debt Management Plan (DMP) is an informal arrangement between you and your creditors that allows you to repay your debts through reduced and affordable monthly payments.
Unlike formal insolvency solutions, a DMP is not legally binding. Creditors may continue to apply interest or charges, although many choose to cooperate with the arrangement.
Potential Benefits
✓ One affordable monthly payment
✓ Flexible arrangement
✓ Can help reduce financial pressure
✓ No formal insolvency process
✓ Suitable for many types of unsecured debt
Things To Consider
- Creditors are not legally required to participate.
- Interest and charges are not guaranteed to stop.
- Repayment periods can be longer.
- Your credit rating may still be affected.
Who May Consider A DMP?
A DMP may be suitable for individuals who can repay their debts but require a more manageable payment structure.
Debt Consolidation
What Is Debt Consolidation?
Debt consolidation involves combining multiple debts into a single repayment arrangement. This can sometimes simplify your finances and reduce the number of monthly payments you need to manage.
Debt consolidation may take different forms depending on individual circumstances and eligibility.
Potential Benefits
✓ Simplified finances
✓ One monthly payment
✓ Easier budgeting
✓ May reduce monthly repayment pressure
✓ Can help improve financial organisation
Things To Consider
- Eligibility criteria apply.
- Total repayment costs may vary.
- Secured borrowing may put assets at risk if repayments are not maintained.
- Not suitable for everyone.
Who May Consider Debt Consolidation?
Debt consolidation may be suitable for individuals who are managing multiple unsecured debts and wish to simplify repayments.
Bankruptcy
What Is Bankruptcy?
Bankruptcy is a formal insolvency solution designed for individuals who are unable to repay their debts. Once declared bankrupt, your assets and financial affairs may be reviewed and managed by a trustee or official receiver.
Bankruptcy can provide relief from overwhelming debt, but it is a serious step and should be considered carefully.
Potential Benefits
✓ Provides a fresh financial start
✓ Protection from creditor action
✓ Can help resolve unmanageable debt
✓ Qualifying debts may be written off
✓ Legally recognised insolvency solution
Things To Consider
- Bankruptcy may affect your assets.
- It can have a significant impact on your credit rating.
- Certain employment restrictions may apply.
- Public records may reflect your bankruptcy status.
Who May Consider Bankruptcy?
Bankruptcy may be appropriate for individuals with severe financial difficulties and limited ability to repay their debts.
Which Debt Solution Is Right For You?
Every financial situation is different. The most suitable debt solution will depend on factors such as:
- Your total debt level
- Your income and expenditure
- Whether you own a property
- Your assets
- Your long-term financial goals
Complete our free assessment today and find out which debt solutions may be available to you.
Disclaimer
Debt Help Support is a trading name of Fair Vantage Solutions Ltd. We are a debt solutions comparison and introduction service. By submitting the form, you confirm that the information provided is accurate to the best of your knowledge and agree that Debt Help Support may share your details with a suitable third party debt solution provider for the purpose of responding to your enquiry. The provider may contact you by phone, email, SMS or WhatsApp. Debt Help Support is a lead generation service and does not provide debt advice or debt solutions. Debt solutions may affect your credit. We introduce customers to authorised and regulated third party debt solution providers and may receive a commission for introductions made. Any debt solution will be subject to your circumstances and eligibility criteria. Fees may apply for ongoing services and will be explained by the provider before you enter into any agreement. Information on this website is provided for general informational purposes only and should not be considered financial or debt advice. Free debt advice is available from 