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Is it possible to write off my unsecured debts?

The simple answer to this question is ‘yes’, because some debt solutions involve getting some or all of your unsecured debt written off. These solutions are most often used by people who are unlikely to be able to afford to repay their debts in full within a reasonable time.

They will not be a suitable option for everyone who is struggling with their unsecured debts. And most of these solutions have stringent qualifying criteria attached; so, depending on your personal and financial circumstances, you may or may not be eligible to take advantage of them.

Other types of debt solutions do involve repaying all your debts in full – albeit normally over a longer time than was stipulated in the original credit agreement.

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Anything to be aware of?

You do need to be aware that any debt solution that doesn’t ultimately involve repaying all your debts in full is likely to have a more significantly adverse effect on your credit rating and make it much harder for you to obtain new credit in the future. Also, in some cases, your details may be entered on a public register (for example, the Insolvency Register), and you may face restrictions on working in certain professions.

Choosing a debt solution which results in some or all of your debts being written off may sound like an attractive option. But, depending on your own financial situation – and your plans for the future – this may not always be the best debt solution for your needs.

A quick summary

Here’s a quick summary of the most common UK debt solutions that can include getting some or all of your unsecured debts written off:

  • Individual Voluntary Arrangement (IVA): This is a formal, legally binding arrangement between you and your creditors whereby you agree to make one affordable monthly payment towards your unsecured debts over a fixed period of time (usually around five years). On successful completion of your arrangement, the rest of your outstanding unsecured debt will be written off by your creditors.
  • Bankruptcy: If you are insolvent, you may be able to apply for bankruptcy. Bankruptcy usually lasts for a year, after which most of your remaining debts will be written off. However, any significant assets (including your home) are likely to be sold off to repay your debts, and even after you have been discharged from bankruptcy you will still face restrictions in obtaining further credit and working in certain professions in the future. 
  • Debt Relief Order (DRO): This may be a viable debt solution for you if you have assets totalling no more than £2,000 in value (£1,000 in Northern Ireland), less than £75 per month of disposable income (£50 in Northern Ireland), and total debts of no more than £30,000 (£20,000 in Northern Ireland). A year after a DRO is declared, the debts that are listed in it are discharged (written off), and you will then be free from those debts. 
  • Trust Deed (Scotland only): This is a debt solution that can help you avoid sequestration (bankruptcy) by allowing you to make regular affordable reduced debt repayments for an agreed term that can be as short as four years. After this time, your outstanding debts are written off. Once creditors accept a Trust Deed proposal, interest and other charges on those unsecured debts are frozen. 
  • Sequestration (Scotland only): This is a serious process whereby control of all your assets is passed to a Trustee who is authorised to offer them for sale (with only a few basic exceptions) in order to raise funds to repay your creditors. After one year (normally) you’re discharged from the sequestration process, and your outstanding debts will be written off. 
  • Minimal Asset Process (MAP) (Scotland only)This is an alternative to sequestration (bankruptcy) for people with limited means. You will be declared bankrupt for a period of 6 months, after which all your debts will be written off. MAP will have a significant effect on your credit record. 
  • Short (or Full & Final) SettlementThis could be a suitable debt solution for you if you have access to a lump sum of money, but little or no disposable income with which to make your regular debt repayments. With a settlement, you offer to pay your creditors a lump sum of money which may be less than the full amount of your outstanding debt to them. In return, they agree to write off all or part of your remaining debt. 


Remember: All of the above debt solutions are subject to specific eligibility criteria, and there are pros and cons involved with each of them, which you need to be aware of. In addition to the above, there are also other debt solution options which ultimately involve repaying all your debts in full, including Debt Management Plans (DMP), Debt Arrangement Schemes (DAS) and Repayment Arrangements with your creditors (was DIY Debt Plans).

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