Government debt help schemes and solutions

The government has a number of ways to help people:

• Pay for childcare
• Pay their energy bills
• Get on the property ladder

The UK and Scottish governments have also introduced a number of 'debt solutions'.

Informal Agreements

These are agreements you make with your creditors. They let you:

• Make changes to your plan, or
• Stop and start, as you need

Formal Debt Solutions

These have rules that need to be met by both:

• The people in debt and
• The people they owe money to

Government Debt Solutions

Individual voluntary arrangement (England, Wales and Northern Ireland)

An IVA is a type of insolvency.

• You make a monthly payment to your debts
• Usually for five or six years
• Unsecured debts are written off at the end

Personal bankruptcy (England, Wales and Northern Ireland)

Bankruptcy is a type of insolvency.

• It writes off your debt
• Income and assets may be taken to pay towards debts

Sequestration (Scotland)

Sequestration is a type of insolvency.

• It is also called 'full administration bankruptcy'
• It is similar to bankruptcy in the rest of the UK
• This is managed by the 'Accountant in Bankruptcy'

Minimal assets process (MAP) bankruptcy (Scotland)

MAP bankruptcy is another type of bankruptcy.

• It is designed for people with few debts and assets

Debt payment programme (DPP) under the Debt Arrangement Scheme - DAS (Scotland)

A DPP through DAS is legally binding.

• It works like a debt management plan
• You make an affordable monthly payment

Debt relief order (DRO) (England, Wales and Northern Ireland)

A debt relief order writes off your debts after 12 months.

• As long as you meet the terms
• It only writes off debt included in the DRO

Protected trust deed (Scotland)

A protected trust deed is a kind of insolvency.

• You make reduced payments for four years
• Unsecured debts are usually written off at the end

The government offers "Breathing Space", also called "the Debt Respite Scheme".

• It does not write off debt
• But it helps takes off some pressure from debt

For up to 60 days, your creditors cannot:

• Add interest or fees to your debts
• Take action to collect the debt

You do need to keep making your regular payments if you can afford to.

Find out if you can get Breathing Space.

There are a few ways debt may be written off.

1. The people you owe do not think you will ever pay them back

This is rare but could happen if:

• You cannot work for medical reasons
• You have a terminal illness

2. The debts are too old to collect

• Some debts cannot be enforced after a certain amount of time
• These are called statute-barred

3. You are finishing an insolvency solution

• Debts are written off at the end of an insolvency solution
• You must meet the agreed terms for this to happen

Find out more about debt write off.