Alternative Debt Solutions

Although we are experts at making Debt Management Plans work for our customers, we would like to take the time to explain the other debt solutions that are available in the UK. This is to help you make an informed decision when you decide what debt solution is right for you.

If you need some extra support in your decision-making, our friendly team of experts is on hand to give you advice that is specific to your situation and debt type.

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Overview

Debt Solution	Debt Amount*	Estimated Term**	Available in
DMP	£1,500 or more	5-10 years	England, Wales and NI
IVA	£6,000 or more	5-6 years	England, Wales and NI
Administration Order	£5,000 or less	3 years	England, Wales and NI
Bankruptcy	No min or max***	1 year	The UK
DRO	£30,000 or less	1 year	England and Wales
DAS	No min or max	6-7 years	Scotland
Sequestration	£3,000 or more	1 year	Scotland
Trust Deed	£5,000 or more	4-5 years	Scotland
Debt Consolidation	No min or max	5-6 years	The UK

(Please scroll sideways if you can't see the full table.)

*Minimum debt balances can vary between different providers. **The actual length will depend upon your personal circumstance. ***For creditors to petition for an individual’s bankruptcy, the minimum debt balance is £5,000.

IVA

An IVA, or Individual Voluntary Arrangement, is a formal agreement between you and your creditors. This agreement helps you deal with your debt through affordable monthly payments and allows for any unpaid unsecured debts to be written off at the end of the IVA duration.

More about IVA

Administration Order

An Administration Order (AO) is a formal agreement between you and your creditors to pay back your debts over a period. It is a legal debt solution which means it’s approved by the court and your creditors must stick to it.

More about Administration Order

Bankruptcy

Bankruptcy may be a debt solution to consider for those struggling with debt they cannot afford to repay. Bankruptcy is a legal status in which people give up control of their non-essential assets to be used in addition to any excess income to repay their debts. Once discharged from Bankruptcy, the people can have a fresh start with their finances.

More about Bankruptcy

DRO

A Debt Relief Order (DRO) is a way of dealing with your debts if you can’t afford to pay them. It typically lasts for one year and involves not making any payments as long as your circumstances do not improve. At the end of the DRO the debts included are written off.

More about DRO

DAS

The Debt Arrangement Scheme (DAS) was introduced to provide Scottish residents with a solution to paying back debts without going insolvent. The DAS allows you to repay your debts at a slower, more affordable rate while allowing for reasonable and essential expenses to be maintained.

More about DAS

Sequestration

Sequestration is a debt solution in Scotland that writes off your debts permanently by declaring to your creditors that you are insolvent, and you will not be fulfilling the repayment contract you have with them. You can either apply to be sequestrated yourself if you meet all the criteria, or one of your creditors can apply to have you sequestrated. Sequestration may also be referred to as full administration or bankruptcy.

More about Sequestration

Trust Deed

A Trust Deed is a formal arrangement available in Scotland and is similar in some ways to an IVA, which is available in other parts of the UK. It allows you to make reduced payments, normally for 4 years. At the end of this time, your remaining debts are written off. A Trust Deed is a form of insolvency, so your debt level, assets, and affordability must all be considered to confirm that it is the right solution for your needs. A money adviser can give advice on whether a Trust Deed is the right debt solution for you.

More about Trust Deed

Debt Consolidation

A Debt Consolidation Loan is just one of many solutions available to those looking to resolve their debts. It is where you take out a loan equal to – or exceeding – the total of the money you owe and use this money to pay off the debts. This leaves you only needing to make one monthly payment to pay off your debts.

More about Debt Consolidation