Breathing Space vs DRO vs IVA vs Bankruptcy vs SDRP

Formal debt solutions are not a ladder you climb — they are separate tools aimed at different situations, and picking the wrong one can lock you into years of payments you cannot sustain. What decides the right choice is the size of your debts, what you own, how much is genuinely left over each month, and how long you can live with the consequences on your credit file and your ability to hold certain roles. This comparison highlights the trade-offs, including one solution that is not yet in force.

Tip: scroll the table sideways to see all columns →

FeatureBreathing SpaceDROIVABankruptcySDRP
Maximum debtNo limit£50,000 (from June 2024)No limit (typically £15k+)No limitNo limit (planned £30k+)
Maximum monthly surplusNo limit£75/monthNegotiable but typically £100+No limitNo fixed limit
Maximum assetsNo limit£2,000 + £4,000 vehicleNo limit (debtors keep more)No limit (trustee can claim)Limit to be set
CostFreeFree (from April 2024)£3,000-£8,000 (paid from contributions)£680 application feePlanned to be free
Duration60 days (180 if Mental Health BS)12 months5-6 years typical12 months until automatic dischargeUp to 10 years
Credit file impactNo direct entry; individual creditors may note6 years from DRO date6 years from IVA date6 years from bankruptcy dateDuration of plan + 6 years
Affects ability to be director
StatusIn force since May 2021In forceIn forceIn forceNot yet commenced (planned)

Get free advice before choosing any formal solution: StepChange (0800 138 1111), National Debtline (0808 808 4000), or Citizens Advice. The right tool depends on full circumstances; this comparison is not a substitute for advice.

Start with breathing space, then decide

Breathing Space is not a solution — it is time. It pauses most enforcement action and freezes interest and charges while you get advice, and it is the sensible first step for almost anyone in crisis, because the other four options all have consequences that last years. Use that window to get a full income and expenditure picture together with a free adviser before committing to anything.

  • Little income to spare, few assets, debts within the limit? A Debt Relief Order is the cheapest route to writing debts off, and it must be arranged through an approved intermediary.
  • A reliable surplus each month and assets you want to keep, such as a home? An individual voluntary arrangement lets you pay an agreed amount for a fixed term with the rest written off — but the term is long, and failing it can leave you back where you started, minus the fees.
  • Debts beyond the DRO limit and nothing to protect? Bankruptcy is often quicker and cleaner than years of IVA payments.

Note that the Statutory Debt Repayment Plan appears here because it has been legislated for but has not commenced. Do not build a plan around it, and treat any firm offering it as a live product with real suspicion.

The most costly mistake is paying a commercial firm for advice that Citizens Advice, StepChange and National Debtline give free — and which is impartial, because they are not paid a fee that depends on which solution you choose.

Frequently asked questions

What happens if I cannot keep up my IVA payments?
Tell your insolvency practitioner immediately rather than missing payments quietly. Arrangements can often be varied — a payment break, reduced contributions, or an extended term — where your circumstances have genuinely changed. If the IVA fails, it is terminated, the protection ends, creditors can pursue the full balance with interest added back, and the fees already paid are gone. That risk is why an IVA should only be entered into where the monthly figure is realistic for years, not just for now.
Can I apply for these solutions myself?
It depends which. Bankruptcy is an online application you make yourself. Breathing Space and Debt Relief Orders must both go through an approved debt adviser, and an IVA requires a licensed insolvency practitioner. That gatekeeping is a protection rather than an obstacle — it means someone qualified checks that the solution actually fits before you commit. Start with a free advice charity, which can either arrange the solution or refer you to someone who can.
Which debts are not covered?
Most formal solutions exclude court fines, child maintenance arrears, student loans and debts arising from fraud, and secured debts such as mortgages are not written off either. Ongoing liabilities like current rent, council tax for the year ahead and utility usage still have to be paid. Bring a complete list of everything you owe to your adviser, including debts to family and anything you feel awkward about, because a debt left out of an application may not be included in the discharge.
Will my partner be affected?
Only where you are legally connected financially. Joint debts remain fully enforceable against the other party, so a creditor can pursue your partner for the whole amount even after your share is dealt with. Joint accounts and any financial association on credit files can also affect their applications. Individually held debts and accounts in their sole name are not affected by your insolvency. Get advice together where there are joint borrowings, because the order in which things are done can matter.

Related guides

Breathing Space (Debt Respite Scheme)

Breathing Space, formally known as the Debt Respite Scheme, gives people in problem debt a legal pause from most creditor action for 60 days. During this period, interest and charges on qualifying debts are frozen, and creditors cannot chase you, take you to court, or send bailiffs. The scheme was introduced in May 2021 and is available in England and Wales.

8 min

Debt Relief Orders

A Debt Relief Order (DRO) is a formal insolvency solution for people with relatively low levels of debt, minimal assets, and very low surplus income. When a DRO is granted, you enter a 12-month moratorium during which creditors cannot take action against you and interest is frozen. At the end of the 12 months, your qualifying debts are written off completely. A DRO can be a powerful fresh start — but it comes with conditions and restrictions.

10 min

Individual Voluntary Arrangements (IVAs)

An Individual Voluntary Arrangement (IVA) is a formal insolvency process that lets you reach a legally binding agreement with your creditors to pay back what you can afford over a fixed period — typically five years. At the end of the arrangement, any remaining debt covered by the IVA is written off.

6 min

Bankruptcy in the UK: The Basics

Bankruptcy is a formal insolvency process that can clear most of your unmanageable debts and give you a fresh financial start. In England and Wales, you apply online to the Insolvency Service, pay a £680 fee, and — if the application succeeds — are automatically discharged from most debts after 12 months.

6 min

Statutory Debt Repayment Plan (SDRP): Status and What It Will Offer

The Statutory Debt Repayment Plan (SDRP) is a planned formal debt-relief option that was provided for in the Financial Guidance and Claims Act 2018, but the regulations needed to bring it into force have repeatedly slipped. As of August 2026 the SDRP is still not operational and no implementation date has been set — only Breathing Space (launched May 2021) exists. This guide explains what the SDRP will offer if and when it launches, why the timeline has slipped, and the formal options available right now.

5 min

Debt Relief Order Changes: The £90 Fee Removal and £50,000 Threshold

Debt Relief Orders are a formal insolvency solution for people with relatively low debts, limited assets, and minimal surplus income. Major changes in 2024 made DROs significantly more accessible: the £90 application fee was removed for new applications from 6 April 2024, and the debt threshold rose to £50,000 (from £30,000). This guide explains the new rules, who qualifies, and the consequences of a DRO.

9 min

Disclaimer

The information on this page was correct at the time of writing. Amounts, thresholds, and rules may change. Always check the latest official guidance.