Comparison Table

Negotiated Agreement with Creditors Debt Re-organisation / Consolidation Loan Debt Management Plan (DMP) County Court Adminstration Order (CCAO) Individual Voluntary Arrangement (IVA) Debt Relief Order (DRO) Bankruptcy
Eligibility No debt limit with something to offer by way of monthly repayment or lump sum No debt limit with something to offer by way of monthly repayment or lump sum No debt limit with something to offer by way of monthly repayment or lump sum Debts of less than £5,000 with at least 2 creditors and at least 1 CCJ debt to be eligible Typically unsecured debts over £7,000 and a monthly surplus of at least £50 Debts of less than £20,000 with assets of less than £1,000, a car value of less than £1,000 & a monthly surplus of less than £50 Unsecured debts that you cannot pay as and when they fall due ( For creditor petitions, unsecured debts exceeding £5,000)
Creditor Protection No, creditors could still take action against you Only binding on creditors paid in full No, creditors could still take action against you No, it will only be binding on creditors who are subject to the Court Order. Creditors can object and ask to be left out of the Order, the Court has discretion to refuse Yes, if your proposal is approved by 75% or more of voting creditors Yes Yes
Debt Forgiveness No debt forgiveness, it will be at your creditors discretion to agree to write off any part of the debt but it is not guaranteed No debt forgiveness Will last until all debts are paid in full. There is no debt forgiveness The court decides how much of your debt you have to repay, eg all or just part of it. The arrangement is known as a ‘composition order’ if you can’t pay all your debts Once completed, any remaining unsecured debts which were included in the IVA are written off Included Debts are written off if no change in circumstances after 12 month moratorium Included Debts are written off once bankrupcty is discharged after 12 months
Interest & Charges Creditors may freeze at their own discretion but this is not guaranteed Interest & Charges will apply as per the contract of the consolidation loan Creditors may freeze at their own discretion but this is not guaranteed Frozen Frozen (You may need to pay interest if the debts are repaid in full) Frozen Frozen (You may need to pay interest if the debts are repaid in full)
Creditor Contact Possibly The consolidating creditor will still be able to contact you, but as all other creditors will be paid off through the consolidation their contact will cease Possibly None of the creditors listed on the administration order application can take further action against you without the court’s permission Usually no contact and no payment requests can be made, but creditors may continue to send statements None None
Costs Possibly, but has the advantage of minimising costs, as there is usually no court involvement You may have to pay fees for arranging the loan Some charities will provide this free of charge and some companies will charge a set-up fee in addition to a handling fee for each payment There is no upfront fee but there is a court fee each time you make a payment. This can’t be more than 10% of your debt Aperture provide initial advice free of charge. The fees & expenses of the IVA are approved by creditors. The specific costs are detailed in the proposal. If the IVA is not approved, there will be no fee charged £90 application fee It will cost £680 to declare yourself bankrupt in England & Wales, and £647 to declare yourself bankrupt in Northern Ireland. Additional fees & costs wil be paid out of asset realisations
Duration No fixed term No fixed term No fixed term The court decides how long the arrangement lasts. If it looks as though it will take more than three years to clear the debts, the court can make a composition order Typically 5 or 6 years for an income based IVA. It is, however, possible to propose a lump sum arrangement thereby reducing the duration Usually 12 months Typically discharged after 12 months, but a Payments Agreement/Order can continue for up to 3 years
Payments As per the agreement with creditors As per the contract of the consolidation loan Monthly payments usually made through a DMP provider, reviewed as creditors require The court decides how much your monthly repayments will be and they must be paid into the court. If you don’t keep up the payments, the court may make an attachment of earnings order. A lump sum or monthly payments based on affordability for a fixed term. The monthly payment may fluctuate with changing circumstances None May have to make payments from surplus income for 3 years if available
Asset Risk Yes, as this is an informal arrangement with your creditors, asset protection is not guaranteed and your home may be at risk Yes, if you fail to manage the payments in respect of any unsecured consolidation loan, asset protection is not guaranteed and your home may be at risk Asset protection is not guaranteed and your home may be at risk The order will only extend to unsecured debts. It will not afford you any protection from repossession proceedings of assets should you fail to maintain your repayments to secured creditors Unless otherwise agreed, assets are protected through the IVA. Typically you will not be required to sell your home, however, you will be expected to attempt to remortgage 6 monhs prior to the end of the IVA should you have sufficient equity You cannot apply for a DRO if you have any assets more than £1,000, or a car worth more than £1,000 Assets may be at risk
Effect on Employment Unaffected Unaffected Generally unaffected If the court makes an attachment of earnings order, your employer will find out about your money troubles. Generally unaffected but you should check your contract of employment May adversely affect current & future employment Can affect current & future employment
Will it be recorded on a Public Register? No No No Yes, will be added to the Register of Judgments, Orders and Fines Yes, will be added to the Insolvency Register Yes, will be added to the Insolvency Register Yes, will be added to the Insolvency Register
Credit rating affected Possibly Possibly Any default notices/CCJs etc issued by creditors remain on your credit file for 6 years after debts are fully satisfied Yes, will show on your credit file for 6 years from the court order Yes, will show on your credit file for 6 years after approval of the IVA Yes, will show on your credit file for 6 years after the date of the debt relief order Yes, will stay on your credit file for 6 years after the date of the bankruptcy order