IVA FAQs › Compare debt solutions
Compare the optionsAn IVA is one of several ways to deal with serious debt, and not always the best. Here is an honest, side-by-side look at how the four main formal and informal options compare.
No single solution is right for everyone. The best choice depends on how much you owe, what you can afford, what assets you have, and where you live. This table sums up the key differences; the notes below add the detail.
| IVA | DMP | DRO | Bankruptcy | |
|---|---|---|---|---|
| What it is | Formal, binding deal to pay what you can over a set term | Informal plan to repay in full over time | Official order freezing debts, then writing them off | Formal insolvency that writes off most debts |
| Best for | Several thousand+ in unsecured debt, with spare income | Manageable debt you can repay given time | Low income, few assets, smaller debts | No realistic way to repay, few assets to lose |
| Typical length | 5 to 6 years | Until repaid (varies) | 12 months | Usually discharged after 12 months |
| Debt written off? | Yes, the remainder on completion | No, you repay in full | Yes, after 12 months | Yes, most qualifying debts |
| Cost | Fees taken from your payments | Free via charities, or fees if commercial | £90 in NI; free in England & Wales | Application fee plus possible contributions |
| Your home | Not force-sold; equity may extend the term | Unaffected by the plan itself | Must have little/no equity to qualify | May be sold for its equity |
| Credit file | 6 years from the start | Stays while debts show, plus markers | 6 years from the start | 6 years from the order |
| Where it applies | England, Wales & NI | UK-wide | England, Wales & NI | England, Wales & NI (sequestration in Scotland) |
Figures and thresholds change, and some differ by nation, so treat this as a guide and confirm the current position with a free adviser.
An IVA suits people with a fair amount of unsecured debt and some spare income each month, who want a binding arrangement that freezes interest and protects them from creditor action. It can protect a home from forced sale, but it lasts years, carries fees, and affects your credit for six years. Read more in the pros and cons of an IVA.
A DMP is an informal plan to repay your debts in full at a more affordable rate, often arranged free through a charity. Interest is not guaranteed to be frozen and it is not legally binding, but it is flexible and has no insolvency marker. See our DMP guide.
A DRO is designed for people on low incomes with few assets and smaller debts. It freezes debts for a year and then writes them off. It is much cheaper than an IVA, but the eligibility limits are strict, and they differ between England and Wales and Northern Ireland. See our DRO guide.
Bankruptcy writes off most debts and can give a faster fresh start, but it puts assets, including potentially your home, at greater risk, and can affect certain jobs. For some people it is genuinely the best route. Compare it directly in IVA vs bankruptcy.
The honest answer is that it depends on your circumstances, and the only way to be sure is to get free, impartial advice that looks at all the options, not just one. That is exactly what the services below provide, at no cost.
You never have to pay anyone to find out where you stand. These services are free, independent and will go through every option with you.