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Thinking about insolvency?

Free, online debt advice is available 24/7.

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

There are several debt solutions available if you're 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.

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 chance of being able to repay
  • An individual voluntary arrangement (IVA) allows you to make reduced payments over 60 or 72 months, after which 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 a relatively low level of debt

Insolvency in Scotland

  • Full administration bankruptcy is the Scottish form of bankruptcy, also known as 'sequestration' 
  • A minimal asset process bankruptcy (MAP) is only available in Scotland for people who have no disposable income and few assets
  • A protected trust deed is only available in Scotland. It's similar to an IVA, except payments are generally made over four years instead of five or six

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.

What are the effects of insolvency?

This depends on which insolvency solution you go ahead with. Generally, the debts included in your agreement are written off if you meet all the terms of your insolvency agreement. You may need to make payments to your creditors and your insolvency practitioner may use some of your assets to repay the money you owe.

alert iconIt’s important to read about the specific ways different insolvency solutions can affect you before going ahead.

Your insolvency solution will be recorded on your credit file and may be listed on the relevant insolvency register. During this time it will be harder to get new credit. Find out more about how debt affects credit files.

Insolvency register

Insolvencies, both personal and corporate, are recorded on The Gazette, which is available to be searched online. In Scotland, personal insolvencies are recorded on the Register of Insolvencies, and only some corporate insolvencies are recorded in the Edinburgh Gazette.

The insolvency register lists details of all current insolvencies and those that have ended within the last three months. Current restrictions (such as bankruptcy restriction orders) are also recorded.

There are also registers for the insolvencies within each country of the UK.

What are the main forms of insolvency?

Bankruptcy is the best known form of insolvency. Scotland has two types of bankruptcy; Full Administration (or sequestration) as well as the ‘minimal assets process’ version, which was designed for people on lower incomes and with fewer assets.

Debt relief orders (DROs) are another type of insolvency available in England and Wales for people on low incomes.

Individual Voluntary Arrangements (IVAs) and Protected Trust Deeds (Scotland) are types of insolvency where you make payments over an agreed term or as a lump sum payment.

Find out more about different debt solutions.

What is the process of insolvency?

The first step in going ahead with insolvency is to get free and impartial debt advice. You’ll get recommendations based on your individual circumstances.

If insolvency is recommended for you and you are happy to go ahead, with a full understanding of how this could affect you, you will follow an application process through an approved organisation.

The applications vary across solutions but all involve getting a clear picture of your financial situation. Your application will then be dealt with by an insolvency practitioner or an approved advisor.

In some cases creditors will apply for someone who owes money to them to be made bankrupt, but many insolvencies are initiated by the debtor rather than the creditor.

mum pushing son on swing

Thinking about insolvency?

Free, online debt advice is available 24/7.

Get debt help now

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. A separate Insolvency Service performs the same role in Northern Ireland. In Scotland the Accountant in Bankruptcy administers the process of personal bankruptcy and records corporate insolvencies on behalf of the Scottish Government.

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.