The 8 main debt solutions
Repaying what you owe
Debt Management Plan (DMP)
An informal plan where you make one affordable monthly payment that's shared between your unsecured creditors, who are asked to freeze interest and charges. Free from charities such as StepChange. You repay the debts in full, with no fixed end date, and you can stop at any time.
Debt Consolidation Loans
A new loan used to pay off several debts, leaving one fixed payment. It only helps if the total cost is lower than your current debts and you don't borrow again. It's usually only available, and sensible, if you're up to date with payments.
Debt Snowball Method
A do-it-yourself strategy: pay the minimum on everything and put all spare money towards the smallest balance, then roll that payment onto the next. The avalanche variation targets the highest interest rate first and saves more interest.
Settling or pausing debts
Full & Final Settlement
Offering a creditor a one-off lump sum that's less than the balance, in return for writing off the rest. Creditors don't have to agree, so get acceptance in writing before paying. Often used when someone in a DMP receives a windfall.
Breathing Space
A government scheme in England and Wales that pauses most enforcement action and freezes most interest and charges for up to 60 days while you get debt advice. You apply through a debt adviser. A longer version exists for people receiving mental health crisis treatment.
Formal solutions that write off debt
Individual Voluntary Arrangement (IVA)
A legally binding agreement, set up by an insolvency practitioner, to pay what you can afford for usually five to six years. Interest is frozen, included creditors can't take action, and the remaining balance is written off if you complete it. Fees come out of your payments.
Debt Relief Order (DRO)
For people with debts up to £50,000, spare income of £75 a month or less, and few assets. There's no application fee. Creditors can't chase included debts, which are written off after 12 months. You apply through an approved debt adviser.
Bankruptcy
A formal insolvency process for people who can't repay their debts. The application fee is £680. You're usually discharged after 12 months and released from most debts, but assets, including equity in your home, may be sold, and you may have to make payments for up to three years.
Debt solutions comparison table
A summary for England and Wales. Each solution has more conditions than fit in a table — follow the links for the full detail.
| Solution | Writes off debt? | Legal protection? | How long | Cost | Public record? | Credit file |
|---|---|---|---|---|---|---|
| DMP | No | No — informal | Until repaid | Free from charities | No | Arrangement to pay or defaults; defaults drop off after 6 years |
| IVA | Yes — balance at the end | Yes | Usually 5–6 years | IP fees, taken from your payments | Insolvency Register until it ends | 6 years from approval |
| DRO | Yes — after 12 months | Yes | 12 months | No fee | Insolvency Register until 3 months after it ends | 6 years |
| Bankruptcy | Yes — most debts | Yes | Usually 12 months (payments up to 3 years) | £680 | Insolvency Register until discharge | 6 years |
| Breathing Space | No — pauses action | Yes, temporarily | Up to 60 days (longer in a mental health crisis) | Free | No — private register only | Not recorded as such; existing arrears may show |
| Full & final settlement | Yes — the rest, if creditor agrees | No | One-off | Free to do yourself | No | Usually "partially settled" |
| Consolidation loan | No | No | Loan term, often 1–7 years | Interest and any fees | No | New loan and credit search; fine if paid on time |
| Snowball / avalanche | No | No | Until repaid | Free | No | No negative effect if you pay as agreed |
Which debt solution might suit me?
Start with two questions: can you afford your priority bills, and could you repay your other debts in full within a reasonable time? If yes, a repayment option is usually best. If not, a formal solution that writes off debt may be more realistic. This is a starting point only — a free debt adviser will look at your whole situation.
| Your situation | Options often worth looking at |
|---|---|
| You're up to date but paying a lot of interest | Snowball or avalanche, a balance transfer, or a consolidation loan if it's genuinely cheaper |
| You're struggling with minimum payments but could repay in full given time | A debt management plan, or asking creditors to freeze interest |
| Creditors are pressing and you need time to get advice | Breathing Space |
| You've come into a lump sum | Full and final settlement offers |
| You can't repay in full, but have a regular surplus and perhaps a home to protect | An IVA |
| Debts up to £50,000, very little spare income, few assets, not a homeowner | A Debt Relief Order |
| You can't repay and no other option is realistic | Bankruptcy |
| You're facing court action, bailiffs or eviction | Get advice now — see CCJs, bailiffs and eviction |
Want rough numbers? Our debt calculator estimates how long repayment would take.
Head-to-head comparisons
Choosing between two options? These guides compare them in detail.
Frequently Asked Questions
What is the best debt solution in the UK?
There is no single best solution. It depends on how much you owe, your income after essential bills, whether you own your home, and whether you can repay in full. People who can repay often use a debt management plan; people who cannot may look at an IVA, a Debt Relief Order or bankruptcy. Free debt advice will compare them for you.
Which debt solutions write off debt?
In England and Wales, an IVA writes off the unpaid balance at successful completion, a Debt Relief Order writes off included debts after 12 months, and bankruptcy usually releases you from most debts on discharge, normally after 12 months. A full and final settlement writes off the rest of a debt if the creditor agrees. A DMP, consolidation loan and the snowball method do not write off debt.
Which debt solutions do not show on a public register?
Debt management plans, full and final settlements, consolidation loans and the snowball method are not on any public register, although they can show on your credit file. IVAs, DROs and bankruptcy are recorded on the Individual Insolvency Register. Breathing Space is recorded on a private register that creditors can see but the public cannot.
Do I have to pay for a debt solution?
Debt advice and debt management plans are available free from charities such as StepChange, National Debtline and Citizens Advice. A Debt Relief Order has no application fee. Bankruptcy costs £680. IVA fees are paid to the insolvency practitioner from your monthly payments.
Get free, impartial debt advice
Free debt advice charities can compare these options for your circumstances, at no cost. We don't sell any debt solutions.