IVA Alternatives

An IVA isn't always the best way out of debt. Everyone's finances are different and there's a range of debt solutions that can help people in different situations. If an IVA isn't right for you, one of these alternatives to an IVA might be able to help you sort out your debt problems.

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What are the alternative solutions to an IVA?

If you...

  • can't afford to make any kind of monthly payment towards your debt, or
  • can repay it fully in under five years, or
  • don't have any valuable property, or
  • don't live in England, Wales or Northern Ireland,

...there could be a different solution that'll be more suitable than an IVA.

All these IVA alternatives come with different 'pros and cons' to an IVA. To find out more about them, just talk to us.

Debt Management Plan

Unlike an IVA, a debt management plan involves repaying your unsecured debts in full. It's not legally binding, so your lenders aren't obliged to stick to the terms until your debts are paid off. They're also not required to freeze interest and charges, so repaying your debts more slowly through a debt management plan could mean you pay more in the long run.

Still, if you can realistically repay all your unsecured debts in less than five years, a debt management plan could be a better idea for you than an IVA. Your lenders would have to agree to it before it could go ahead.


Unlike an IVA, bankruptcy can cost you any property you own - but it should also be over faster, it could write off all your unsecured debt, and it won't require regular payments unless you can afford them.

If you can't realistically commit to monthly payments for five years and/or you don't own any valuable property, bankruptcy might be a better option than an IVA.

The Insolvency Service says that 'The principal statutory alternative to an IVA is bankruptcy'.

Having said that, the Service also says that 'Bankruptcy should always be the last resort, as the debtor will lose control of their assets and will be subject to bankruptcy restrictions, potentially up to 15 years.'

Here's an in-depth look at the differences between IVAs and bankruptcy.

If you're a Scottish resident, you should be aware that bankruptcy works differently north of the border - and is often called 'sequestration'. For example, you can't choose to enter bankruptcy in Scotland unless one of your lenders agrees to it, or has already gone to court and obtained a ruling that you owe them money.

Scotland's Insolvency Service is called Accountant in Bankruptcy (AiB).

Debt Consolidation loan

Taking out a debt consolidation loan can be a good way to reduce your monthly costs, helping you repay the money you owe at a pace you can comfortably afford (although repaying it more slowly can cost you more in the long run).

If your debts are still under control and you're just looking for a better and/or simpler way of repaying them, a debt consolidation loan could be right for you - it wouldn't be suitable if you're already facing serious debt problems.

Debt consolidation loans are often secured against property. It's important you think very carefully before securing a debt against your home, as it could be repossessed if you don't keep up with payments on it.

Debt Relief Order (DRO)

A Debt Relief Order is a new form of insolvency, introduced in April 2009. Entering a DRO costs just £90 - far less than entering bankruptcy - and it wouldn't require any monthly contributions at all. A DRO would write off all your debts at the end of a 12-month period (in which you'd pay nothing towards your debts at all).

However, unlike IVAs and bankruptcy, DROs can only help people with very little in the way of income or assets: they're simply not available to people with property worth more than £300 or a monthly disposable income of more than £50. They're also not an option for anyone who owes more than £15,000.

Like IVAs, DROs are only available to people who live in England, Wales or Northern Ireland.

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To find other sources of free advice visit Money Helper. It's here to listen and give free, impartial, trusted guidance. Based around you and backed by government.

Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for at least 6 years. Homeowners may be required to release the equity in their property.