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Bankruptcy Options: Understanding Your Choices in 2026

If you are struggling with debt and wondering what your bankruptcy options are, you are not alone. Thousands of people across the UK face financial difficulty every year, and there are several formal solutions available to help you regain control.

The information on this page is for general guidance only and does not constitute financial advice.

What Are Your Bankruptcy Options?

When debts become unmanageable, you broadly have four formal insolvency options in England and Wales:

There are also less common routes such as a County Court Administration Order (CCAO).

Bankruptcy: How It Works in 2026

Bankruptcy is a legal process that writes off most of your unsecured debts. You apply online through the Adjudicator at the Insolvency Service, and the current application fee is \u00a3680.

  • Bankruptcy typically lasts 12 months, after which you are discharged
  • Most unsecured debts are written off
  • Your assets may be sold to repay creditors, though essential household items are protected
  • If you have surplus income, you may need an Income Payments Agreement (IPA) for up to three years
  • Bankruptcy appears on your credit file for six years

For a full breakdown, see our cost of bankruptcy guide.

Individual Voluntary Arrangement (IVA)

An IVA is a legally binding agreement between you and your creditors to repay a portion of your debts over five to six years, managed by a licensed Insolvency Practitioner.

  • You have a regular income and can afford monthly payments
  • You owe at least \u00a36,000 to two or more creditors
  • You want to protect your home and other assets

Find more information from MoneyHelper.

Debt Relief Order (DRO)

A DRO is for people with low debts, few assets and little spare income. The fee is \u00a390 and you apply through an approved intermediary such as StepChange.

  • Debts no more than \u00a330,000
  • Assets worth no more than \u00a32,000
  • Surplus income no more than \u00a375 per month
  • Must not own property

A DRO lasts 12 months, after which your debts are written off.

Debt Management Plan (DMP)

A Debt Management Plan is an informal arrangement where you make reduced monthly payments based on what you can afford. It is not legally binding.

  • Flexible arrangement that can change with your circumstances
  • No formal insolvency record
  • Free services available from StepChange and MoneyHelper

Which Bankruptcy Option Is Right for You?

Choosing between these options depends on how much you owe, your assets, your income and your goals.

  • Bankruptcy: best for large debts you cannot repay. Costs \u00a3680.
  • IVA: best if you have regular income and want to protect your home.
  • DRO: best for low debts under \u00a330,000, few assets. Costs \u00a390.
  • DMP: best for flexibility without formal insolvency.

Read our guide on whether bankruptcy is right for you or explore alternatives to bankruptcy.

Free Bankruptcy Options Analysis

Use our Bankruptcy Eligibility Checker to see which solutions may be available to you.

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Debts You Can Include in a Formal Solution

Most unsecured debts can be included:

  • Credit cards
  • Personal loans
  • Overdrafts
  • Payday loans
  • Catalogues and store cards
  • Council tax arrears
  • CCJs
  • Online shopping credit

Some debts cannot be included. See our guide on debts not written off by bankruptcy.

Get Help With Your Bankruptcy Options

Our team can help you understand your options and find the right path forward. Call 0161 843 1515 or complete the eligibility checker for a free, no-obligation assessment.

This page provides general information about bankruptcy options in England and Wales. It does not constitute financial or legal advice.

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