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, after priority debt has been dealt with.
​There is no time limit.  You may be paying for many years.

​Free debt-management plan (DMP)

​Usually over £5,000. ​Credit debts only. ​There is no time limit. You may be paying for many years.

​Protected trust deed

​At least £5,000.  Some insolvency practitioners may set their own minimum debt level at higher than £5,000. ​Most debts except: mortgages, secured loans, rent (but arrears from a previous tenancy can be included), student loans, court fines, maintenance (but child support arrears can be included), debts owed because of fraud (including benefit overpayments). ​At least four years.

​Bankruptcy

A creditor can only issue a bankruptcy petition if you owe £3,000 or more.  You can also make yourself bankrupt if you owe £3,000 or more.
​Most unsecured debts except: student loans, court fines, maintenance due under a court order, debts incurred through fraud (including benefit overpayments). ​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 four years.

Minimal asset process (MAP) bankruptcy

​The total amount of your debts must be at least £1,500 and no more than £17,000. ​Most unsecured debts except: student loans, court fines, maintenance due under a court order, debts incurred through fraud (including benefit overpayments). You will be discharged after six months. However, you will be under certain restrictions for a further six months after discharge.

​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.

​Debt Arrangement Scheme (DAS)

No minimum or maximum level of debt.​
All debts must be included: priority debts such as council tax arrears and non-priority debts like credit cards. Debts being collected by a deduction from a social security benefit continue to be taken.

For individuals, couples and sole traders: any reasonable length of time, but usually within 12 years.

​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.