“Debt write-off” is advertised a lot online, sometimes in misleading ways. No scheme makes debt disappear for free. But there are legal routes to having debt you can’t afford written off, each with costs and consequences.
The short answer
- An IVA writes off remaining included debts if you complete it.
- A DRO writes off qualifying debts after 12 months, for people with low income and assets.
- Bankruptcy writes off most debts, usually after 12 months, but affects your home and assets.
- Creditors sometimes write off debt for serious illness or hardship.
- Some debts, such as student loans and court fines, can’t be written off this way.
Formal ways to write off debt
- IVA: you pay what you can afford for five or six years, and the rest of the included debt is written off if you complete it. See how much debt is written off in an IVA.
- Debt Relief Order: for debts under £50,000, little spare income and few assets. Qualifying debts are written off after 12 months.
- Bankruptcy: most debts are written off on discharge, usually after 12 months, but your home and valuable assets may be sold.
Can a creditor write off my debt?
Creditors sometimes write off debts where someone has a serious long-term illness, a terminal diagnosis or no realistic prospect of ever paying. You’ll usually need evidence, such as a letter from your doctor. Debt charities can help you ask.
What about a lump sum?
A full and final settlement can clear a debt for less than the full balance, with the rest written off.
Which debts can't be written off?
Student loans, court fines, child maintenance and debts from fraud usually can’t be written off through an IVA or DRO. For council tax, see can council tax debt be written off?
Common questions
Is debt write-off a government scheme?
No. Adverts sometimes suggest this, but IVAs, DROs and bankruptcy are legal procedures, not government grants. Each has costs and consequences.
How much debt can be written off?
It depends on the solution and your circumstances. In an IVA, the amount written off varies from person to person and depends on creditor approval.
Does writing off debt affect my credit rating?
Yes. IVAs, DROs and bankruptcy all stay on your credit file for six years.
Getting help
You don’t have to deal with debt on your own. Free, impartial advice is available from MoneyHelper, StepChange and National Debtline. If you want to talk through whether a formal solution such as an IVA could be suitable, you can also get in touch with us.