Money and debt advice and support

Formal ways of dealing with debt

There are some situations in which a more formal method can be best, but you would pay a fee and there can be other disadvantages. We would always recommend trying to come to a payment arrangement directly with your creditor before considering any of these options.  

Administration Order  

If your non-priority debts total no more than £5,000 and you have at least one County Court Judgment, you can ask the court to make an Administration Order. This lets you make one payment every month to the court, who take a small fee and then share the remainder among your non-priority creditors.    

Find out more about Administration Orders on the National Debtline website 

Debt Relief Order  

Debt Relief Orders are intended to help people who have no realistic way of paying their debts. You may be able to apply for a Debt Relief order if your: 

  • Home is not owned by you 
  • Assets are not worth more than £300 
  • Income is not more than £50 a month after normal household expenses 
  • Debts do not total more than £20,000 
  • Situation is not likely to improve. 

 You will need to pay a £90 fee and apply through a debt adviser who is an approved intermediary. The creditors who are listed on your Order cannot take action for a set period, usually a year, and if nothing has changed at the end of the period, the debts on the Order are discharged. 

See the Guide to Debt Relief Orders.

The Money Advice Service has information about organisations that can help you find an authorised debt advisor 

Individual Voluntary Arrangement (IVA) 

 This is a formal version of an informal arrangement. Your creditors vote on whether to accept your proposals and, once an IVA is made, it is legally binding. You must pay an Insolvency Practitioner to organise an IVA and this can be expensive. 

Find out more about what an IVA is and if it’s right for you on the National Debtline website.


Bankruptcy is intended to be a fresh start for people who are in severe financial difficulties. In certain circumstances, you can be discharged from bankruptcy one year or even less after the bankruptcy order is made. However, applying for personal bankruptcy is a serious step to take. 

 If you are ordered to make payments from your income, this can be for up to three years. If the court makes a Bankruptcy Restrictions Order, this will restrict your activities for up to 15 years. If you own your own home, you can lose it. 

You cannot get further credit while you are bankrupt, any bank account you have will be frozen and you may lose your job if you work in certain professions.  

Bankruptcy should be an absolute last resort for people with serious debt issues. Find out more about it by reading the Government’s Guide to Bankruptcy.

Or call the Insolvency Enquiry Line on 0845 602 9848.