IVAs & Bankruptcy
The formal ways to deal with debts you can't repay, compared side by side.
When debts have grown beyond what you could ever realistically pay back, the law offers a fresh start. Each option has a cost, rules to follow and a lasting effect on your credit, so it's a decision to make with a free debt adviser – never in a hurry, and never because of an advert.
Three Options Compared
For people in England and Wales.
| Feature | Debt relief order | IVA | Bankruptcy |
|---|---|---|---|
| Best suited to | Lower debts, little spare income, few assets, not a homeowner | People who can afford regular payments towards their debts | People who can't repay their debts in a reasonable time |
| How long it lasts | 12 months | Usually five or six years | Usually ends after 12 months |
| Cost to apply | Free | Fees are taken from your payments | £680 |
| Your home | You can't have one if you own a home | Usually kept, but you may need to release equity | May have to be sold |
| On your credit file | 6 years | 6 years | 6 years |
A debt relief order is generally for people who owe less than £50,000, have less than £75 a month spare, and have under £2,000 in assets. Source: GOV.UK, checked 19 October 2026.
Rules To Know
- Telling lenders. While you have a debt relief order or are bankrupt, you must tell a lender before borrowing more than £500. Not doing so is a criminal offence.
- Public records. Debt relief orders, IVAs and bankruptcies are listed on the public Individual Insolvency Register.
- Work and business. Some jobs and roles are restricted, such as being a company director without the court's permission.
- Not every debt is covered. Things like student loans, court fines and child maintenance usually still have to be paid.
Be wary of IVA adverts. Social media ads that promise to "write off" most of your debt are often from firms paid when you sign up to an IVA. A free adviser will tell you honestly whether an IVA, or something else, is right for you.
Scotland And Northern Ireland
Scotland has its own options, including protected trust deeds, sequestration (Scottish bankruptcy) and the Minimal Asset Process, overseen by the Accountant in Bankruptcy. Northern Ireland also has its own versions of these solutions with different limits. A free debt adviser where you live can explain which ones apply to you.
IVA And Bankruptcy Questions
Can I get credit after an IVA or bankruptcy?
It is difficult while it is in place and for some time after. Once it has ended, rebuilding steadily is the best approach – our guide to rebuilding your credit explains how. Some lenders consider people whose insolvency has ended, and our bad credit loans page explains what they look at.
Who can set up a debt relief order?
Only an approved debt adviser can apply for you, and they won't charge you. You can't apply for one on your own.