Debt advice

2. Debt solutions

There are a number of debt solutions available to resolve your debt problems. Which one is suitable for you will depend on your particular circumstances.

Debt solutions include:

Administration order

An administration order is a legal way of dealing with debts of £5,000 or less by including them on a court order.

Payment plan

A payment plan is an informal arrangement between you and your unsecured creditors. This may be an option for you if you have had a change in your circumstances.

Full and final settlement

If you have a lump sum of money available that would cover part of your debts, you could ask your creditors to accept part payments in full and final settlements of the whole debts.

Bankruptcy

Bankruptcy is a legal way of dealing with your debts and may be suitable if you have significant debts and little or no assets or disposable income.

Debt relief order

A debt relief order is a legal way of dealing with your debts and may be suitable if your total debt is below £20,000 and you have little or no assets or disposable income.

Individual voluntary arrangement

An individual voluntary arrangement or IVA is a legally binding arrangement between you and your creditors which is supervised by an insolvency practitioner.

Write off

In exceptional circumstances, if you have no available income to offer to creditors and you have no savings or assets, you can ask your creditors to consider writing off your debts.

All of the above options will have an effect on your credit reference file. You can find more information about this on the Money Advice Service website.

For more information on debt solutions, including factsheets, budget plans and sample letters, visit the National Debtline website.