Insolvency
iThis advice applies across the UK.
Insolvency means you cannot afford to pay your debts in a reasonable amount of time.
There are many debt solutions you can choose if you are insolvent.
These are legally binding, which means:
- They give you protection from the people you owe
- They can write off some or all of your debts
Every insolvency solution is different.
- Each has different criteria to apply
- Often your debt total must be more than the value of your assets
We offer free debt help and support with the different types of insolvency.
UK insolvency solutions
Insolvency solutions vary depending on where you live in the UK.
Insolvency in England, Wales and Northern Ireland
Bankruptcy:
- Can help you write off debt
- If you have no realistic chance of being able to repay
Individual voluntary arrangement (IVA):
- Make smaller payments over 60 or 72 months
- After this, the rest of the debt is written off
Debt relief order (DRO):
- Can write off debt for people who have:
- A small disposable income
- Few assets
- A relatively low level of debt
Insolvency in Scotland
Full administration bankruptcy:
- The Scottish form of bankruptcy
- Also called 'sequestration'
Minimal asset process bankruptcy (MAP):
- Only available in Scotland
- For people who have:
- No disposable income
- Few assets
Protected trust deed:
- Only available in Scotland
- Similar to an IVA
- Payments usually made over four years
Find out more about different debt solutions.
How do I go insolvent?
Every insolvency option has its own application process.
In some cases, you need a government-approved money advisor to make the application. We can help you with this.
In rare cases, the people you owe can apply to a court to make you bankrupt.
- This costs them a lot
- They may do this if they think you have enough assets to repay your debts
- They might not get any money if they make a person with small assets bankrupt
Contact us if you think you are about to be made bankrupt.
We can advise you what to do.
What are the effects of insolvency?
This depends on which solution you choose.
- Many of your debts will be cancelled or 'written off'
- As long as you follow the terms of your agreement
- You may need to make payments to the people you owe
- Your insolvency practitioner may sell your assets to pay back what you owe
Make sure you learn how insolvency solutions can affect you before making a choice.
Insolvency and your credit score
Insolvency is recorded on your credit file.
- It may go on the relevant insolvency register
- This make it harder to get new credit
Find out more about how debt affects credit files.
Insolvency register
Insolvencies are recorded in The Gazette, which can be searched online.
It includes:
- Personal insolvencies
- Corporate insolvencies
In Scotland:
- Personal insolvencies go on the Register of Insolvencies
- Corporate insolvencies sometimes go in the Edinburgh Gazette
The insolvency register has details of:
- Current insolvencies
- Insolvencies that ended within the last three months
- Current restrictions (such as bankruptcy restriction orders)
Each UK country has a Register of Insolvencies.
- England and Wales: The Individual Insolvency Register
- Northern Ireland: The Insolvency Service Registers
- Scotland: Register of Insolvencies
What is the process of insolvency?
First, get free and impartial debt advice.
Find out if insolvency is a good choice for your situation
Understand how it could impact you
Follow the application process through an approved organisation
Applications vary across solutions but they all need a clear picture of your financial situation.
Your application will be dealt with by:
- An insolvency practitioner, or
- An approved advisor
In some cases, the people you owe may apply to make you bankrupt. But usually, you (the debtor) start the process.
- How to apply for bankruptcy
- How to apply for a DRO
- How to apply for an IVA
Thinking about insolvency?
Free, online debt advice is available 24/7.
Get debt help now
UK insolvency regulators
Each country has their own regulating body and different laws.
- The Insolvency Service regulates insolvency in England and Wales
- A separate Insolvency Service performs the same role in Northern Ireland
- In Scotland the Accountant in Bankruptcy administers the process of personal bankruptcy and records corporate insolvencies on behalf of the Scottish Government
Insolvency help
Use our free online debt advice tool for expert insolvency help.
This confidential service helps you:
- Build a budget
- See if insolvency could work for you
Related articles
- Bankruptcy
- Debt relief order (DRO)
- Individual voluntary arrangement (IVA)
- Sequestration (Scottish bankruptcy)
- Minimal assets process
