10 ways to clear your debt

Find the best option for you.

This table summarises each of the 10 options for dealing with your debt.  You can compare:

  • how big or small your debts would have to be to use each of these methods;
  • what type of debt could be repaid using each option, and
  • how long you could expect to wait before you would be debt free. 

Click on the links to learn more about each option. 

​Type of arrangement

How much must I owe?

What type of debt?

​How long will it last?

​Informally negotiated arrangement with creditors

​No minimum or maximum level of debt. ​Credit debts only. ​There is no time limit.  You may be paying for many years.

​Free debt-management plan (DMP)

​Usually over £4,000 ​Credit debts only. ​There is no time limit. You may be paying for many years.

​Individual voluntary arrangement (IVA)

​None, but due to costs better if you owe over £15,000. ​Most debts except: secured debts, rent, student loans, court fines, maintenance and child support. ​No time limit, but usually five years.

​Bankruptcy

A creditor can only issue a bankruptcy petition if you owe £750 or more.
 
You can make yourself bankrupt however much you owe.
​Most debts except: student loans, court fines, maintenance, child support, budgeting loans and crisis loans. ​Most people are discharged from all their debts after one year (but there are exceptions to this).  If you have spare income you may have to make payments for three years.

​Debt relief order (DRO)

​Under £15,000. ​Most debts except: student loans, court fines, maintenance, child support, budgeting loans and crisis loans. ​You will be discharged from your debts after one year.

​Administration order

​£5,000 or below. ​Credit debts and some priority debts. ​You can ask for a ‘composition order’, which means the debts may be written off after a shorter time such as two or three years.  Otherwise, there is no time limit.  You may be paying for many years.

​Consolidation loan

​No minimum or maximum level of debt.  It will depend upon what the lender is prepared to lend. ​Any debts your lender allows you to include. ​The length of time it takes you to repay the loan.

​Offers in full and final settlement

​No minimum or maximum level of debt. ​Usually credit debts. ​A short time, unless payment is in instalments.

​Write off the debt

​​No minimum or maximum level of debt. ​Usually credit debts. ​Debts would be cleared.

​Charitable payments towards debts

​​No minimum or maximum level of debt. ​Depends on the charity, but usually priority debts. ​Debts would be cleared or reduced.