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4 Alternative Solutions If Your IVA is Rejected

An Individual Voluntary Arrangement, commonly known as an IVA, is a legally binding agreement between you and your creditors that helps you pay off your debt in an affordable way. 

An Insolvency Practitioner (IP) will assess your income and expenditure to determine how much you can afford to pay. Your IP will then put a repayment plan forward to your creditors, detailing why you’ll be paying the amount suggested. It is at this point that your IVA can be rejected by your creditors. 

If your IVA is rejected, this does not stop your IP putting forward another repayment plan to your creditors. However, if your IVA is rejected again, or if you have come to the conclusion that an IVA debt solution isn’t right for you, then it should be a comfort to know that there are other options available which could help you in your financial situation. 

We have put together some of the pros and cons of debt consolidation, bankruptcy, a debt management plan, and a debt relief order, to hopefully help you decide on the best option for you.

1) Debt Consolidation Loan

Debt consolidation is a term used when you have several debts which you decide to combine into one loan. This can be done by taking out a new loan in order to pay off your original loans. There are a few pros and cons to debt consolidation. We have listed some of these below.


  • All of your debts will be in one place.
  • Once the original loans are paid off in full, you will no longer be threatened with legal action by the initial creditors. 
  • The debt of your new loan can be repaid through monthly installments. As It’s only one loan that you’re repaying, the interest rates can be much lower, making it more affordable.


  • If you have poor credit, then it’s unlikely that you’ll be approved for a new and bigger loan. 
  • If you are approved, then the interest rate could still be high, although you’ll only be paying for one loan.
  • There may be extra costs involved so it is important that you seek impartial advice.


2) Debt Management Plan

A debt management plan is an informal arrangement between you and your creditors where you use a third-party company to set up the plan and distribute money to them. As with debt consolidation, there are a few pros and cons to a debt management plan and we have listed some of these below.


  • It can be relatively easy to arrange.
  • You can make one regular monthly payment. 
  • You pay back your debt in full, but at an affordable rate for you through reduced monthly payments.


  • Your debts must be paid in full.
  • If your creditors decide they are no longer happy with the informal arrangement that you agreed upon, then they could still take legal action against you.
  • It could take longer for you to be debt-free than other formal debt solutions.

3) Bankruptcy Pros and Cons

Bankruptcy is a legal status which allows you to obtain a clean slate. If you owe less than £30,000, then you might be able to get a debt relief order (see more on this below). But in terms of bankruptcy, there are a few pros and cons to consider. We have listed some of these below.


  • Most types of debt can be written off if you cannot pay them.
  • Once declared bankrupt, creditors can no longer take legal action against you. 
  • In most cases you will be discharged from Bankruptcy after 12 months.


  • Some of your assets may be taken from you and divided equally to pay off your creditors.
  • Your bankruptcy is publicly available information. Details will be published in the London Gazette and on the Insolvency Register.
  • If you have a business, this can be taken from you or sold.

4) Debt Relief Order Pros and Cons

A Debt Relief Order (DRO) is an alternative to bankruptcy if you have limited assets and affordability. There are a few pros and cons to a DRO and we have listed some of these below.


  • Any future interest and charges will be frozen on any debt you owe. 
  • Your creditors will no longer be able to take legal action against you.
  • Your DRO will only last twelve months after which any debts will be written off.


  • To be considered for a DRO, you must meet certain criteria, such as your debts must not exceed £30,000 and you must reside in England, Wales or Northern Ireland. Also, your surplus income must not exceed £90 per month.
  • Homeowners are not allowed to apply for a DRO.
  • Your DRO will go public, appearing on the public register.

Now that we have detailed some of the pros and cons to various debt solutions, you may find it easier to decide which option will suit you best. However, if you are still in need of IVA debt help, then contact us today.

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May not be suitable in all circumstances, Fees may apply, your credit rating may be affected.

Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.

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