Comparing the two debt solutions

Both Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs) are debt solutions with different processes and qualifying criteria.

Below are some key points to help understand whether you might be able to consider either of these options.


Key similarities include:

Debt write off: Both include your creditors writing off some debt for you. With an IVA, this is after your monthly payments have been kept up for 5 years. With a DRO, this is after one year if your circumstances have not changed.

Interest and Charges: With these solutions, creditors will freeze your interest and charges for the duration, so you will not incur further debt as long as the terms of each solution are being adhered to.

Insolvency Register: Your details will be listed on the Insolvency Register with both of these solutions – this is a publicly available database.

debt solutions


Key differences include:

Individual circumstances: Both require different levels of debt and affordability in order to qualify.

Duration: An IVA lasts around 5 – 6 years and a DRO lasts 12 months, although both are recorded on your credit file for 6 years.

Assets: DROs are designed for non-homeowners and those with very few assets. For an IVA, homeowners and non-homeowners are eligible to apply.

debt solutions

Qualifying Criteria


  • You would be expected to be able to afford at least £80 per month as a minimum to be considered.
  • You must have debts with more than one creditor that can be included in the arrangement and at least 75% of your creditors must agree to the IVA in order for it to be approved.
  • To be considered for an IVA, you should have a debt level of at least £6,000.

Debt Relief Order

  • You must have no more than £30,000 of debt to be considered.
  • Your monthly disposable income must be £75 or less.
  • There is a fee of £90 to apply which must be paid in full before you will be considered for the DRO. This will be refunded if your application is not accepted.

Can I switch to a DRO whilst on an IVA?

If you are already underway with an IVA, it’s not possible to simply cancel this in order to apply for a Debt Relief Order. During your application process, it should be clear whether you would qualify for a Debt Relief Order, based on your debt level and affordability.

If you apply for a DRO and this fails due to a change in circumstance or other reason, then you might be able to look into IVAs as a possible solution.

It’s also important to note that you can’t apply for either of these solutions if you have been involved in any form of insolvency within the last 6 years.

What next?

If you are struggling with debts, then don’t hesitate to reach out to an experienced debt advice service. Whilst Debt Relief Orders are a great solution, the qualifying criteria exclude a larger number of people compared to an IVA.

At Money Advice, we are IVA specialists, so if you would like to go ahead with this particular solution then we can help you put together an IVA application.