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i The advice on this page applies to anyone with personal debts taken out in the UK.


What is insolvency?

Insolvency is when you can’t afford to pay back your debts at the time they're due.

There are several debt solutions available if you are insolvent. These are legally binding so they give you protection from your creditors and write off some or all of your debts.

Each insolvency solution is different and has its own qualifying criteria. In most cases insolvency solutions are only suitable if your debts add up to more than the value of the assets you own.

Our specialist teams can provide free debt help and support with the different types of insolvency.

Thinking about insolvency?

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UK insolvency solutions

The insolvency solutions available to you vary depending on where you live in the UK.

Insolvency in England and Wales
  • Bankruptcy can help you write off debt you have no realistic hope of repaying
  • An individual voluntary arrangement (IVA) allows you to make reduced payments over 60 or 72 months then the rest of the debt is written off 
  • A debt relief order (DRO) can write off debt for people who have a small disposable income, few assets and relatively low level of debt
Insolvency in Scotland
  • Sequestration is the Scottish form of bankruptcy
  • A trust deed is only available in Scotland. It's similar to an IVA except payments are generally made over three years
  • A Minimal Asset Process bankruptcy (MAP) is only available in Scotland for people who have no disposable income and few assets
Insolvency in Northern Ireland

Insolvency solutions in Northern Ireland are the same as in England and Wales:

  • Bankruptcy
  • An individual voluntary arrangement (IVA)
  • A debt relief order (DRO)

How do I go insolvent?

Every insolvency option has a different application process. In some cases you need a Government approved money advisor to make the application, and we can help you with this. 

In rare cases your creditors can apply to a court to make you bankrupt. This is expensive for the creditor and is most commonly used where someone has enough assets to repay their debts. If a creditor makes someone with small assets bankrupt, there's no guarantee they'll get any money back. If you think a creditor is about to make you bankrupt, contact us immediately for specialist advice.

UK insolvency regulators

Insolvency law is different depending on where in the UK you live. Each country has their own regulating body. 

The Insolvency Service regulates insolvency in England and Wales. In Scotland it’s regulated by the Accountant in Bankruptcy, and there’s also the Northern Ireland Insolvency Service.

Insolvency help

For expert insolvency help use our free online debt advice tool. This confidential service will help you build a personalised budget, to see whether insolvency is the best solution for you. Or call us (free from all landlines and mobiles) to speak to one of our expert debt advisors in confidence.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

We link to external websites where they contain relevant information for our visitors. We're not responsible for the content of these websites, or any infringement on your data rights under data protection regulations by any external website provider.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2019