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What is your approximate debt?

Hint... don’t forget to consider these commonly missed debts when calculating your debt level: Bailiff enforcements, council tax, HRMC and rent arrears.

Why 121 Debt solutions?

  • No more phone calls or letters from creditors
  • Write off debts over £5000
  • One tailored monthly payment
  • No obligation, friendly advice

Example Debt

Credit Card: £8,000
Store Card: £3,000
Bank Overdrafts: £1,000
Personal Loans: £8,000
Payday Loans: £4,000
Council Tax: £1,000
Furniture Credit: £1,000
Total Debt: £26,000

IVA Example

Payments before IVA: £680.00 Per month
Payments after IVA: £206.00 Per month

This is an example - The reduction in monthly debt payments compared to IVA payments is down to each person’s individual circumstances.

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An IVA is a legally binding agreement between you and your creditors to repay all or part of your debt in monthly instalments over a fixed time period, usually five years. This period can be longer dependant on each person’s personal circumstances.

An IVA covers most debts, so its scope is wider than the DM. There are no minimum or maximum debt requirements, but most creditors will not agree to an IVA unless you owe at least owe £7000.


  • Over a fixed period or up to 5 years
  • Single monthly payment
  • Can include tax arrears and utility debts


  • Must have a minimum level of debt to qualify.
  • You will be added to the insolvency register
  • Some employers do not allow an employer to have an IVA
  • Will damage credit rating
  • Cannot include debts secured against property, such as your mortgage, or any hire purchase plans.
  • If you owe less than £7000 an IVA might not be the most appropriate solutions

If you have County Court Judgements (CCJ) against you – and you have two or more debts of less than £5,000 in total – you could apply to the county court for an administration order. As with an IVA, an administration order is legally binding and allows you to pay off your debts in regular instalments over an agreed period.


  • The court decides a fair amount and monthly payment
  • No upfront fees
  • One monthly payment for up to 3 years.
  • You will not lose your house.


  • Debts must be less than £5000
  • The court can require you to sell any valuable posessions
  • Payments normally match your monthly disposable income
  • The court takes a 10% monthly fee

If you cannot afford to make any payments towards your debts, you could ask your creditors to simply write off the outstanding amount. Of course, they will only agree in exceptional circumstances, perhaps if you are ill or on an exceptionally low income. It is always worth asking though.

You could apply for a debt relief order (DRO). They are only available in England and Wales and can be a cheaper alternative to bankruptcy. However, there are strict criteria. Your total debts must be worth less than £20000 and your disposable income must be £50 or less to qualify.


  • Most debts can be included within the DRO.
  • Debt from unsecured creditors can take no further action against you once the DRO has been made.


  • Not available to homeowners
  • Secure creditors can still take action towards you
  • Details of your DRO will be kept on the Individual Insolvency Register
  • Your credit rating will be affected.
  • Cannot have savings of over £300 or assets over £1000.

This will depend on your personal circumstances and level of debt.

Bankruptcy is when an individual obtains a court order via a petition where they seek relief from some or all their debts. You must have owed at least £5000 to a creditor. Bankruptcy must be a last resort as many restrictions are put on the individual like being unable to obtain credit or act as a director of a company.

Bankruptcy Pro's

  • You may be debt-free in just 12 months.
  • You won't need to deal with your creditors.
  • Creditors can't take any further action against you.
  • You won't have to give up all your belongings

Bankruptcy Con's

  • You won't be in control of your assets or finances.
  • Your bank account may be frozen.
  • You might lose your home.
  • You might lose your job.
  • Your bankruptcy is listed in the Insolvency Register.
  • You will have to abide by a number of strict rules.
  • You may still have to make payments to creditors if you have disposable income.

This will depend on your personal circumstances and level of debt.

A DMP (Debt Management Plan) is a payment plan aimed at allowing to pay a monthly affordable sum to your creditors. The plan is managed by a debt solution practice (regulated by the FCA). They will set up your payment plan and work with your creditors to get interest and charges frozen. The plan needs to demonstrate that you can repay your debt over a reasonable period of time.

DMP Pro's

  • Unaffordable debt payments are replaced with an affordable monthly payment
  • Your DMP provider deals with your creditors
  • If interest and charges are frozen, you only repay the capital sum

DMP Con's

  • You cannot incur credit over £500
  • Not all creditors will participate
  • Creditors are not obliged to freeze interest and charges
  • You must make consistent payments

The system is slightly different in Scotland. If you have enough money, you can repay your debts through the Scottish government’s debt arrangement scheme (DAS). The DAS must be set up by an approved adviser. You then pay back the money you owe in instalments over a reasonable time.


  • You have more time to pay and you can pay what you afford monthly until the debts are paid.
  • Protects you from enforcement action.
  • You won't have to declare yourself insolvent.
  • Your debts will not increase.


  • Must have more than one debt
  • You must live in Scotland
  • You will be on the scheme until your debts are paid off.
  • It will affect your credit rating
  • You will incur fees

A trust deed is the Scottish equivalent of an IVA, although there are some differences. The maximum term is usually 48 months and you must have debts of at least £5,000 to qualify. When the Trust Deed is completed any remaining debts are usually written off.


  • All creditors are paid with one monthly payment
  • Normally lasts for a period of 4 years
  • You only pay monthly your disposable income


  • It will affect your credit rating.
  • You may have to sell or remortgage your property.
  • Only unsecured debts are covered.

MAP bankruptcy gives you a fresh start by writing off debts that you can't repay within a reasonable time. It is aimed at people with a low income and not many assets and is cheaper and more straightforward than sequestration (or full administration bankruptcy). You can only apply for MAP through an approved money advice organisation.

What debts can go into an IVA?

  • Personal Loans
  • Credit & Store cards
  • Council Tax Arrears
  • Overdrafts
  • Payday Loans
  • Catalogues
  • Overdue Bills
  • Business debt

Try to Avoid Debt

Many banks or building societies offer short-term payment holidays to those in financial hot water – but they will be much less sympathetic if you only get in touch after you have started missing payments.

If your debts are really getting on top of you, though, a debt charity such as StepChange is the best place to look for help. It can help you to decide between a variety of ways out, including setting up a debt management plan and even going bankrupt.

One way to do this is to consolidate several balances onto a credit card that charges 0% on balance transfers – or pay off your debts with one low-rate loan.