What’s the difference between an IVA, DMP, DRO, Bankruptcy and Trust Deed?

IVA and Trust Deed are formal, legally binding plans that usually freeze interest and can write off remaining qualifying unsecured debt after completion. A DMP is informal and relies on creditor agreement to freeze interest. A DRO is for low income/low assets; debts are written off after 12 months. Bankruptcy provides the quickest reset but may impact assets and has stricter restrictions.

Who is eligible for an IVA?

Typically people with around £6,000+ of unsecured debt, multiple creditors and a steady income. Assets and affordability are assessed by a licensed Insolvency Practitioner.

How long does each solution last?

Typical terms: IVA 5–6 years, Trust Deed ~4 years (Scotland), DRO 12 months, Bankruptcy 1 year to discharge, DMP varies by affordability.

Will these solutions affect my credit file?

Yes. Formal solutions are recorded for 6 years from start (or discharge for bankruptcy). Many people rebuild credit after completion.

What debts can I include?

Most unsecured debts such as credit cards, loans, overdrafts, catalogues and BNPL can be included. Secured debts (mortgage/HP), child maintenance and certain fines are generally excluded.

Do I pay fees upfront?

For IVAs and Trust Deeds, fees are set out in your proposal and taken from your affordable monthly payments once approved. A DRO has a government-set fee; bankruptcy has application/court fees. DMP provider fees vary (many charities charge no fees).

Can I switch solutions later?

Yes, if circumstances change, it may be possible to switch. Get advice before making changes.

IVA vs DMP — which is better?

Choose an IVA if you have higher unsecured debts, need legal protection and want remaining qualifying debt written off after completion. Choose a DMP if you need flexibility and an informal plan; interest freezes depend on creditor agreement and there’s no automatic write-off.

IVA vs DRO — which fits my situation?

A DRO is often best if you meet strict low income/low asset criteria; debts can be written off after 12 months. If you don’t meet DRO criteria but have steady income and need legal protection, an IVA may be suitable.

IVA vs Bankruptcy — what’s safer?

Bankruptcy is the fastest reset but can affect assets and comes with restrictions. An IVA can help protect assets if you can afford monthly contributions and need a legally binding plan that usually freezes interest and enforcement.

Compare UK Debt Solutions — IVA, DMP, DRO, Bankruptcy & Trust Deed

Quick answer: The right solution depends on your debts, income and assets. Formal options like an IVA or Trust Deed usually freeze interest and stop most enforcement. A DRO can write off debts after 12 months if you meet strict criteria. DMPs are flexible but informal. Bankruptcy is the fastest reset but impacts assets and restrictions.

Why Compare Debt Solutions Before Choosing

✅ Find what’s affordable for your budget
✅ Understand legal protections and risks
✅ See which debts can be included or excluded
✅ Know the impact on your credit file
✅ Learn typical timeframes to become debt-free

IVA vs DMP — What’s the Difference?

If you’re deciding between an IVA vs DMP, it usually comes down to how much you owe and whether you need legal protection.

Choose an IVA if you have ~£6,000+ unsecured debts, a steady income and need interest and most enforcement legally stopped. Remaining qualifying debt can be written off after completion.
Choose a DMP if you want a flexible, informal plan with payments you can adjust. Interest freeze depends on creditor agreement and there’s no automatic write-off.

Rule of thumb: Higher debts + need for certainty → IVA. Variable income or temporary difficulty → DMP.

Is an IVA better than a DMP?

It can be if you need legal certainty (frozen interest/enforcement and potential write-off). A DMP is better for flexibility without a formal insolvency.

Which is cheaper: IVA or DMP?

IVA fees are taken from approved contributions; DMPs can be free via charities. The “cheapest” route depends on affordability and whether interest continues.

IVA vs DRO — Which Is Best?

Comparing IVA vs DRO hinges on income, assets and total debt.

Choose an IVA when you have regular income to contribute monthly and want to protect assets where possible. Typical term 5–6 years.
Choose a DRO if you meet strict low income/low asset criteria. Debts are written off after 12 months if your situation doesn’t improve.

Rule of thumb: If you pass DRO criteria, it’s often the quickest/cheapest reset. If not, an IVA may still give strong protection and a clear end-date.

Is a DRO better than an IVA?

Often yes, if you qualify — a DRO can be faster and cheaper. If you don’t qualify, an IVA may still offer protection and a write-off after completion.

Do I pay IVA or DRO fees upfront?

IVA fees are taken from contributions after approval. A DRO has a government-set fee; we’ll explain what applies to you.

IVA vs Bankruptcy — What Should I Choose?

Choosing between IVA vs Bankruptcy depends on asset risk and how fast you need a reset.

Choose an IVA if keeping your home or certain assets is important and you can afford a fair monthly contribution. It’s legally binding and usually freezes interest/enforcement.
Choose Bankruptcy for the fastest clean break (normally 1 year to discharge) when repayments aren’t realistic — but be aware of potential asset impacts and restrictions.

Rule of thumb: Need speed and have limited assets → Bankruptcy. Want to protect assets and can pay monthly → IVA.

Is bankruptcy quicker than an IVA?

Usually yes (around one year to discharge). An IVA typically runs 5–6 years but can better protect assets depending on equity.

Will either option wreck my credit?

Both affect your credit for roughly six years, but many people rebuild after completion or discharge. We’ll show realistic timelines.

Costs & Fees — What to Expect

IVA / Trust Deed: Nominee & supervisory fees taken from your affordable payments (set out in the proposal).
DRO: Government-set fee; debts written off after 12 months if criteria remain met.
Bankruptcy: Application/court fees; implications for assets and surplus income.
DMP: Provider fees vary; many charities charge no fees. Interest freeze not guaranteed.

Eligibility at a Glance

IVA: Usually £6k+ unsecured debt, multiple creditors, steady income.
DMP: Flexible; suitable if you can pay something but need it reduced.
DRO: Low income/low assets within set limits; debts written off after 12 months.
Bankruptcy: For debts you can’t realistically repay; fastest full reset.
Trust Deed: Scotland only; similar to an IVA.

Legal Protections & Impact on Your Credit File

IVA / Trust Deed / Bankruptcy: Legally binding; stop most enforcement. Recorded on your file for ~6 years (bankruptcy from discharge).
DRO: Legal moratorium for 12 months; mark remains for 6 years.
DMP: Informal; creditors may resume action; defaults/arrangements can affect your file.

How Long Do They Last?

IVA: 5–6 years (sometimes +12 months instead of equity release).
DMP: Varies by debt size and affordable payment.
DRO: 12 months to write-off (if circumstances fit).
Bankruptcy: ~1 year to discharge; some payments/orders may continue longer.
Trust Deed: ~4 years in Scotland.

How to Choose the Best Debt Solution (Step-by-Step)

List your debts. Note balance, arrears, and whether each is secured/unsecured.
Prioritise essentials. Keep rent/mortgage, council tax and energy up to date first.
Build a realistic budget. Include food, transport and essentials — not just debts.
Match options. Compare IVA/DMP/DRO/Bankruptcy/Trust Deed against your situation.
Choose and start. Formal options usually freeze interest and stop most enforcement once approved.

Quick Decision Helper

Answer these quick questions to see likely options:

Repayment vs Write-Off Calculator

Estimate how long repayments might take without help vs using a formal solution:

Official Guidance & Trusted Free Support

For added reassurance, review these trusted UK resources about debt solutions:

🏛️ GOV.UK: Options for dealing with your debts
🛡️ FCA: Debt help for consumers
🤝 StepChange: Free debt advice
📞 National Debtline
🧭 MoneyHelper: Dealing with debt

Frequently Asked Questions

Can I switch from one solution to another?

Yes, if your circumstances change. Always get advice first to avoid unintended consequences.

Will I lose my home or car?

Formal solutions aim to protect essentials but equity and high-value assets can affect terms. We’ll explain safeguards and options clearly.

Is help free?

Our guidance is free and confidential. Any third-party fees for formal solutions are disclosed in writing before you decide.

Compare Your Debt Solutions and Take Control Today

Don’t delay. Compare your options with expert help from Fresh Start Debt Support and choose the route that’s safest for you.