The Alternatives, One by One
Every main route out of debt, and who each one tends to suit.
What are the main alternatives to an IVA?
An IVA is one of several ways to deal with debt, and it is not always the best. The main alternatives are a Debt Relief Order, a Debt Management Plan, bankruptcy, Breathing Space, and simply arranging to repay your debts over time. In Scotland, a Protected Trust Deed or the Debt Arrangement Scheme take its place. The right one depends on how much you owe, your income and what you own.
Is a Debt Management Plan an alternative?
Yes, and it is often a good one. A Debt Management Plan lets you repay your debts in full at a lower monthly rate, with no insolvency marker and the freedom to change or stop it. Nothing is written off, so it suits people who can clear their debts given more time. Free providers such as StepChange set them up at no cost.
Could a Debt Relief Order be better than an IVA?
For some people, yes. A Debt Relief Order is cheaper and quicker than an IVA: it has no fee, lasts twelve months, and writes off qualifying debts up to £50,000. It is only open to people with a low income, few assets and no property, but if you qualify it is usually the better, cheaper route, so it is always worth checking first.
Is bankruptcy an alternative to an IVA?
Yes. Bankruptcy is usually over in twelve months and writes off most unsecured debts, but it carries a £680 fee and can mean losing assets, including your share of a home. It tends to suit people with little income or few assets who want a quick, clean break, rather than those with a home or steady income to protect.
What is Breathing Space?
Breathing Space is not a debt solution in itself, but it can be a useful first step. It gives most people 60 days of legal protection from creditor action and interest, while you get advice and decide what to do. There is also a longer version for people receiving mental health crisis treatment. It buys time to choose the right route, including an IVA or one of its alternatives.
Are there alternatives if I live in Scotland?
Yes. IVAs are not available in Scotland. Instead, a Protected Trust Deed works much like an IVA, writing off part of your debt over around four years, while the Debt Arrangement Scheme lets you repay in full over time with interest frozen. Sequestration is the Scottish form of bankruptcy. A free Scottish adviser can help you compare them.
Could I just arrange to repay my debts myself?
Sometimes, yes. If your debts are fairly small or your situation is temporary, you may be able to agree reduced payments directly with your creditors, or clear the debt over time with a budget. This is the simplest route and leaves no formal marker. A free adviser can help you work out a realistic offer and check whether a formal solution would actually serve you better.
How do I choose the right alternative?
Get free, impartial advice before you commit to anything. A free adviser, from a service like MoneyHelper, StepChange or Citizens Advice, will look at your debts, income and assets and talk you through every option, not just an IVA. There is no charge and no obligation, and it is the single best way to make sure you pick the route that genuinely fits.
