Write off debt

Here’s Why an IVA Could Be Your Best Choice to Write Off Debt

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Worried about debt but don’t want to lose your home or car? There may be a way to deal with what you owe—without giving up the things that matter most.

Every year, thousands of people in the UK use government-backed debt solutions to reduce what they owe. In some cases, a large part of the debt is written off. It’s not for everyone, and there are things you need to think about first.

In this guide, we’ll explain how it works, the pros and cons, and what to do if you’re ready to take the next step.

Understanding Debt Relief Options

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Dealing with debt can feel overwhelming. But you’re not alone—and there are options that can help. Some debt solutions are formal, like IVAs or bankruptcy. Others are informal, like payment plans with creditors. Before making a decision, it’s important to understand how each one works—and what it might mean for you.

You can get free, impartial advice from a debt adviser or through MoneyHelper. They’ll help you find the right path based on your situation.

How To Write Off Debt?

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If you’re looking to write off debt in the UK, there are three main solutions that might help.

Each comes with pros and cons. The right one for you will depend on how much you owe and your personal situation.

It’s important to act early. The longer you leave debt unchecked, the harder it gets. In some cases, creditors may send bailiffs to recover what’s owed. While jail is rare, it can happen in certain cases—like unpaid council tax.

The good news? You can take steps today to start sorting things out. This guide will walk you through your main options, so you know what to expect.

Let’s take a look.

Option 1: Bankruptcy

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You can apply for bankruptcy yourself. It costs £680. Once you’re declared bankrupt, an official receiver takes control of your finances. Most of your debts will be written off, which can ease the pressure and give you a fresh start.

But there are downsides. Your credit rating will be badly affected. You may lose your home and other valuable items. And your bankruptcy will be listed publicly.

It’s a big step—so make sure you get proper advice before going ahead.

Option 2: Debt Relief Order

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A DRO is a simpler, cheaper form of bankruptcy. It’s designed for people on low incomes with little or no assets. Recent rule changes mean the £90 fee has been removed for those on the lowest incomes—making it more accessible.

To qualify, you must meet strict limits:

• Total debts of £20,000 or less (£15,000 in Northern Ireland)

• Assets worth no more than £1,000 (£300 in Northern Ireland)

• A car worth no more than £1,000

• Less than £50 spare income each month

If you meet all of these, you can apply. After 12 months, the debts included in your DRO will be written off.

A DRO can work well if you can’t afford to pay anything right now. But what if you can make some repayments—and want to keep your home or car? That’s where an Individual Voluntary Arrangement (IVA) might be a better fit. Here’s how it works.

Option 3: Individual Voluntary Agreement (IVA)

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If you owe over £5,000 in unsecured debt—like loans, credit cards, overdrafts, or benefit overpayments—an IVA could help.

It lets you combine all your debts into one monthly payment, based on what you can actually afford. You’ll make payments for a set time—usually five years. After that, any remaining debt is written off.

The best part? You may be able to keep your home, car, and other assets.

For many, this is the most practical option. That’s why we’ll focus on IVAs for the rest of this guide.

Is an IVA an Official Government Debt Help Scheme?

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Yes—an IVA is a formal debt solution backed by UK law.

It’s designed to help people avoid bankruptcy and deal with debt in a manageable way. If approved, it can lead to some of your debt being written off.

IVAs are fully legal, confidential, and growing in use across the UK. They can also help protect your home and car—something bankruptcy can’t always do.

That said, an IVA isn’t right for everyone. It’s important to get proper advice based on your situation before making any decisions.

So How Does an IVA Work to Write Off Debt?

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An IVA is set up and presented to your creditors by a licensed Insolvency Practitioner (IP). They’re regulated by the Insolvency Practitioners Association (IPA), so you’re in safe hands.

The IVA is a formal agreement to repay your debts. It’s based on what you can afford—and it can be flexible if your situation changes.

Your payments can come from your income, help from a third party, or a lump sum. Sometimes it’s a mix of all three.

We know it’s easy to get lost in technical terms like “credit card debt,” “debt consolidation loans,” or “new rules to write off debt.”

What to expect from the IVA Process

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• First, an adviser will go through your income and spending.

• They’ll make sure you’ve got enough for food, bills, and everyday needs.

• What’s left goes towards your IVA. This must be at least £80 a month, for 60 months.

• Your IVA proposal is then shared with your creditors. They’ll vote on whether to accept it.

• If creditors owed at least 75% of the total debt say yes, the IVA is approved and becomes legally binding.

• Once you’ve made all your payments, the rest of your debt is written off.

• That’s it—you’re officially debt-free.

What About My Credit Rating?

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Once your debt is written off, it’s cleared from your record from that date. On your credit file, it will show as paid or paid in full. If you missed payments before your IVA, those marks will stay on your credit file for six years. But after that, they’ll drop off too.

Criteria, Advantages & Disadvantages of an IVA

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If you’re still reading, there’s a good chance you meet the criteria for an iva. To check out if you meet each of the specific requirements, you can check out this article.

Like with everything, there are both advantages and disadvantages to an IVA. You can click the link for our full deep-dive on all the aspects that you may wish to consider, or keep reading for a summary of the most notable.

Pros of an IVA:

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• You can become completely debt-free

• Some of your debt may be written off

• Creditors can’t chase you once the IVA starts

• You’ll make one affordable monthly payment

• You may be able to keep your home and car

• Avoid the stigma and restrictions of bankruptcy

• Your pension is protected

• Interest on your debts will stop

• No more late fees or extra charges

• No upfront setup costs to get started

Cons of an IVA:

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• Not everybody is eligible
• You will be asked to make a monthly payment
• You may have to release equity in your house

How to Choose an IVA Company to Write Off Debt

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If you’ve considered the pros and cons and feel that you could be one of many who would benefit from an iva, you may be wondering how to actually start the process.

As there are several companies that offer IVAs, there’s a lot to consider. That’s why we’ve produced a full, detailed post on exactly what to look for in an IVA company.

Broadly speaking, we will choose a company that:

• charges no upfront fees
• scores highly on independent review sites
• offers low monthly payment rates
• is well established in the industry
• has a strong online presence

Of course, debt issues can vary greatly from person to person, which is why we don’t advise you to look at only one company for a debt solution. It may lead to biased advice and/or overpayment.

That’s why we advise you to contact iva Advice to do the hard work for you and help to determine the best company for your needs.

Working with a Debt Adviser

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A debt adviser can provide expert guidance on managing debt and help individuals choose the most suitable debt solution. They will assess the individual’s financial situation, including their income, expenses, and debts, and advise on the best way forward. A debt adviser can also help individuals access free advice and support, such as the Breathing Space scheme, which provides temporary protection from creditors.

Breathing Space

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Breathing Space is a government scheme that gives individuals temporary protection from their creditors while they seek debt advice and plan for how they will repay their debts. The scheme provides a 60-day period during which creditors cannot take action against the individual, and interest and fees are frozen. Breathing Space can be accessed through a debt adviser, and individuals can apply for the scheme if they are struggling with debt and need time to seek advice and make a plan.

Next Steps and Support

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Once an individual has chosen a debt solution, it’s essential to take the next steps and seek support. This may involve working with a debt adviser to implement the debt solution, such as setting up a debt management plan or individual voluntary arrangement (IVA).

Individuals can also access support from debt charities and organisations, such as Citizens Advice or Christians Against Poverty, which provide free debt advice and support. individuals can use online resources, such as the MoneyHelper website, to access free advice and guidance on managing debt.

Why Speak With Us About Debt Advice and Write Off?

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Many people struggling with debt say that it causes them significant distress, and some even experience a mental health crisis. In fact, 50% of people in debt have a mental health problem.

That’s why we’re here.

We can help you to make the best decisions for your personal circumstances and assist you in achieving debt write off as soon as possible.

How Can I Get Started With a Debt Write Off Plan?

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The good news is that you can get started today.

Use our FREE online calculator to find the best company for your circumstances, then submit your documents to them electronically and get debt write off help, quickly and easily.

Financial Advisor at IVA Advice

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I am a CII Advanced Diploma Financial Advisor with over 15 years of experience working with FCA Regulated Finance Companies in the insurance, credit card, loan and debt industry.

I am very familiar with The Civil Enforcement Association and the High Court Enforcement Officers Association and I have written extensively on Financial Services matters.

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Frequently Asked Questions

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Debts can be written off formally through an Individual Voluntary Arrangement (IVA). This applies to people who have £5000 or more of unsecured debts: such as loans, credit cards, overdrafts, payday loans etc.

It is unlikely that you will end up in jail for not paying your bills on time. It is more likely that your creditors will instruct bailiffs or debt collectors to try to reclaim the money.

Debts can only be written off formally through either bankruptcy or insolvency.

When you write off debt it is completely removed from the record from the date it was written off. On your credit history, it will show as paid/paid in full. If you have missed any payments on this debt, they will also show on your credit file.