The battle of two of the biggest formal debt solutions available in the UK (with bankruptcy watching cautiously from the side): Debt Relief Order versus Individual Voluntary Arrangement.


  • AKA: Debt Relief Order
  • Debts: Under £20,000
  • Legally Binding: Yes
  • Duration: One year
  • Fee: £90
  • Assets: Can only have £1,000 total worth
  • Interest/Charges: Frozen
  • Public: Insolvency register
  • Creditor Contact: Stopped
  • Credit Report: Six years
  • Missed Debts: Cannot be added
  • Partners Debts: Cannot be included


  • AKA: Individual Voluntary Arrangement
  • Debts: £7,000 or more
  • Legally Binding: Yes
  • Duration: Five years
  • Fee: Varies
  • Assets: Protected
  • Interest/Charges: Frozen
  • Public: Insolvency Register
  • Creditor Contact: Stopped
  • Credit Report: Six years
  • Missed Debts: Can be added
  • Partners Debts: Can be included

In Short

A debt relief order (DRO) is for people with low incomes and few assets, whereas individual voluntary arrangements (IVA) are for those people who can afford to make repayments at an affordable rate and want to protect their assets.

Will My Credit Rating Be Affected?

Both solutions negatively affect your credit rating as you are in the position of not repaying your creditors, and both will show on your credit report for six years. This will mean a lower credit score and less chance to obtain new credit. However, once you have been accepted onto your chosen solution, you are in an ideal situation to start rebuilding your credit score, ensuring that after the six years, you have a good, solid credit score.

Will It Affect My Employment?

There are certain financially responsible roles where either of the solutions may have a negative effect on your employment, however this is rare, and you are likely to know if this is the case. If you are on a debt relief order you are unable to act as a company director without permission from the court. With an IVA you can continue as usual, as long as you make the agreed payments.

Expert Advice

Obviously you cannot make such an important decision by reading a short article on the internet, this is why we suggest you talk to one of our trained advisers. Complete this simple form, there are just five questions, and one of our friendly, experienced advisers will call and discuss your situation to see if you are eligible for a debt relief order or an individual voluntary arrangement– and if not, what else you can do.

All of our advice is without charge and there is absolutely no obligation to use any of the solutions we may suggest to you. So what have you got to lose?