Key points
- Write-off usually comes through an IVA, DRO, bankruptcy or (in Scotland) a Trust Deed
- No honest company can promise how much will be written off before checking your situation
- Creditors can sometimes write off debt voluntarily, for example because of serious illness
- Formal solutions stay on your credit file for six years
- Priority debts like council tax are treated differently
Which debt solutions can write off debt?
- Individual Voluntary Arrangement (IVA): you pay what you can afford, usually for five or six years, and any remaining included debt is written off at the end. England, Wales and Northern Ireland.
- Debt Relief Order (DRO): for people with low income and few assets, with debts up to £50,000. After 12 months, qualifying debts are usually written off. England and Wales.
- Bankruptcy: most unsecured debts are written off, usually after 12 months, but your assets may be sold.
- Protected Trust Deed: the Scottish equivalent of an IVA, usually lasting four years.
Can a creditor just write off my debt?
Sometimes. If your situation is unlikely to improve, for example because of serious illness, disability or very low income with no prospect of change, a creditor may agree to write off a debt. You'll usually need to send evidence. A debt adviser can help you put the request together.
Some creditors will also accept a full and final settlement: a one-off lump sum that's less than the full balance. Always get the agreement in writing before you pay.
What's the catch?
- Formal solutions are recorded on your credit file for six years, and some appear on a public register.
- An IVA is a long commitment, and missing payments can make it fail.
- Homeowners may need to release equity, and bankruptcy can put your home at risk.
- Some debts can't be written off, such as most student loans, court fines and child maintenance.
Beware of promises
Adverts that promise to "write off 80% of your debt" are a red flag. How much (if anything) is written off depends on your income, essential costs and assets. The only way to know what's realistic is to have your situation properly reviewed.
Frequently asked questions
Can all debt be written off?
No. Unsecured debts like credit cards, loans and overdrafts can usually be included in a formal solution, but debts like student loans, court fines and child maintenance usually can't.
Is there a government scheme to write off debt?
There is no special scheme that writes off debt for everyone. IVAs, DROs and bankruptcy are legal processes set out in law, and anyone can use them if they qualify.
How much debt do I need to have written off?
There's no minimum for every option, but each solution has its own rules. For example, a DRO is for debts up to £50,000, and IVAs usually suit people owing several thousand pounds to two or more creditors.
Free debt advice is available
You can get free, impartial debt advice from not-for-profit organisations through MoneyHelper's debt advice locator.
Sources and further reading
This guide is general information, not advice, and was correct when last updated. Rules and limits can change. Speak to a regulated adviser about your own situation.