Options in England, Wales and Northern Ireland

If your financial situation becomes too difficult to sort out on your own, then the following options may be available to you.

For more details and for information on how to go about these, we strongly suggest you seek professional advice from the useful contacts shown on the Financial difficulties page.

Temporary Repayment Plans

This is an arrangement set up via one of the advice providers shown under Useful Contacts on the Financial difficulties page. Your budget is carefully calculated and the money you can afford to pay is then divided up fairly amongst your creditors, based on how much you owe to each.

Your adviser may also help you to negotiate having your interest frozen for a period of time to prevent your debt from increasing.

This is usually the first step you should take, and by setting a proper budget you can avoid any problems in the future.

Important information about Temporary Repayment Plans:

  • There are no set up costs
  • Your credit record could recover more quickly
  • If you have many creditors it will take you some time to contact them initially
  • Creditors will inform Credit Reference Agencies that a Repayment Plan is in force, which could affect future lending decisions

Individual Voluntary Arrangement (IVA)

This is an alternative to bankruptcy and is a formal agreement to pay an agreed amount off your debts over a set period.  This is not suitable for everybody and is usually only worth looking at if you have money spare each month to pay your creditors.

You will need to use an Insolvency Practitioner to set this up for you and all Insolvency Practitioners charge a fee - the average fee being £7,000.

Important information about IVA's:

  • If you're self-employed you can continue to trade whilst under an IVA
  • The Insolvency Practitioner could make you bankrupt if the IVA isn't kept up
  • It's expensive to set up
  • It's possible you may have to sell your house or give most of your equity to your creditors
  • An IVA will stay on your credit file for 6 years after discharge, making it more difficult and more expensive to obtain credit in future


You can either declare yourself bankrupt or be made bankrupt by one of the people you owe money to.  Whilst you are bankrupt your assets, such as electrical equipment or your car, can be sold to pay off your debts. Your property might also be sold if you have any equity in it.

After a period of time, usually 1 year, all your outstanding debts are written off.  The cost of bankruptcy is currently £450 deposit plus a £150 court fee.

Important information with bankruptcy:

  • You will usually have to close your bank or building society account
  • Your employment may be affected - check your contract of employment
  • You will probably find it difficult to obtain credit in future even after the bankruptcy period.  The bankruptcy order will be held by credit reference agencies for at least 6 years.
  • Details of bankruptcy cannot be kept secret and will normally appear in your local paper