Is it possible to write off debt in the UK? - Creditfix (2024)

If you have outstanding debts that you are struggling to pay, you may have wondered whether it is possible to have them written off completely.

The good news is, there are several debt solutions out there that can allow you to partially or fully have your debts written off so you can get yourself back on your feet and look forward to a debt-free future. This can help you make better financial decisions and avoid the serious consequences of bankruptcy.

In this guide, we’ll tell you how you can write off debt and which debt solutions are available to help you do so based on your financial circ*mstances.

Can debt be written off?

In the UK, it is possible to legally write off all or most of your outstanding debt by entering into a debt solution that both you and your creditors have agreed to.

There may even be instances where your creditors agree to write off all your debts without a debt solution in place but this depends on the individual situation and whether your creditors are willing to set aside the money they are owed. This is known as a debt write-off.

But as with most debt solutions, there are rules as to what kind of debts can and can’t be written off.

Is it possible to write off debt in the UK? - Creditfix (1)

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What kind of debts can be written off?

When it comes to writing off debt, most unsecured debts can be written off but there are different rules depending on the type of debt you owe.

For example, if you have any accounts that are in arrears or secured against an asset, such as a mortgage, they can’t be written off.

You can ask your lender to write off your mortgage debt but it is unlikely they will agree unless you come to an agreement to repay some of what you owe.

Your local council may also be able to write off your Council Tax debt under exceptional circ*mstances, such as extreme financial hardship, but this can be difficult and is usually only considered as a last resort.

Similarly, debts owed to HM Revenues and Customs (HMRC) for Tax Credit overpayments are rarely written off and, in most cases, you will be expected to repay what you owe.

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How can I write off my debts?

There are several debt solutions out there that can help you write off some or all of your unsecured debt, including:

Individual Voluntary Arrangement (IVA)

An IVA is a legally binding agreement between you and your creditors to write off your debts in exchange for repaying a portion of what you owe every month for a total of five or six years.

It can only be set up and managed by a Licensed Insolvency Practitioner who will act as a mediator between you and your creditors to ensure both parties are happy with the proposed terms.

If your financial circ*mstances allow, it may also be possible to repay your total debt with a single lump sum paid to your License Insolvency Practitioner and split amongst your creditors. This can reduce the length of time you are in your IVA and help you write off your debts sooner.

Debt Relief Order (DRO)

A DRO is another option for writing off your debts and is best suited for low-income debtors with low debt levels and little to no assets that have tried and failed to repay their debt through alternative means.

Similar to an IVA, a DRO also requires monthly payments and protects you from further action from your creditors whilst you are actively making payments.

If you are looking to write off your debts within a relatively short space of time, a DRO usually only lasts around 12 months with your debts written off, or discharged, when you come to the end of your 12-month period.

Debt Management Plan (DMP)

A Debt Management Plan is a debt solution that can allow you to repay what you owe at an affordable rate by making a single monthly payment to your DMP provider who will distribute the money to your creditors.

Your creditors may also choose to freeze interest and extra charges on your debt and cease legal action against you which can help you gain a firmer grasp on your finances.

If you’ve fallen behind on your household and utility bills, you may also be able to add your arrears to your DMP alongside your existing monthly payments to get your accounts back up to date.


Bankruptcy is a type of insolvency that can help you write off unsecured debts that you can’t afford to repay.

However, bankruptcy is usually only advised when other forms of insolvency have been attempted as it can have a serious impact on your credit rating and you may be required to give up some of your assets, such as your home or car.

When you complete your bankruptcy, all of your unsecured debts will be written off and you will be free to make a fresh start with your finances.

Can debt still affect my credit score after it has been written off?

If you have missed payments and unpaid debts, your credit score will be affected regardless of whether you have paid them off or are in the process of paying them off. However, how long your credit rating is affected depends on which debt solution you have chosen to write off your debt.

For example, whilst an IVA will usually only last five years, it will remain on your credit file for a total of six years from the date it was approved.

During this time, it will lower your credit score and impact your ability to get a loan, mortgage or further credit.

Similarly, a DRO, DMP and bankruptcy will also remain on your credit file for six years regardless of whether it has been written off and you are technically debt-free.

This is why you must always consider the long-term impact of entering into a debt solution because whilst it will succeed in having your debt written off after a certain period, it will leave a mark on your credit history.

Where can I get more advice on Is it possible to write off debt in the UK? and other debt solutions?

To discuss your options and get the support you need to deal with your debt today, contact us now on 0800 0431 431 or click the button to get started

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Is it possible to write off debt in the UK? - Creditfix (2024)


Is it possible to write off debt in the UK? - Creditfix? ›

There may even be instances where your creditors agree to write off all your debts without a debt solution in place but this depends on the individual situation and whether your creditors are willing to set aside the money they are owed. This is known as a debt write-off.

Can you actually write off debt UK? ›

If you apply for an administration order, you may be able to have some of your debt written off. This is called a composition order. You can ask the judge for a composition order or the judge may decide to give you one after looking at your financial circ*mstances.

How long until a debt is written off in the UK? ›

For most debts, the time limit is 6 years since you last wrote to them or made a payment. The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

Can you write off credit card debt? ›

The simple answer to this question is yes, you can get your credit card debt written off — at least in certain cases. But as you may imagine, there's nothing simple about that process, which often includes negotiations with credit card companies and debt collection agencies.

How do I get out of debt UK? ›

Ways to clear your debt
  1. Informally negotiated arrangement.
  2. Free debt management plan (DMP )
  3. Individual voluntary arrangement (IVA)
  4. Bankruptcy.
  5. Debt relief order (DRO)
  6. Administration order.
  7. Debt consolidation and credit.
  8. Full and final settlement offer.

What happens if you ignore debt UK? ›

If you don't, your creditor might take more action to get the money back. For example, they might ask the court to send bailiffs to your home or take money from your wages. After the judgment, your creditor might ask the court to secure the debt against your home - this is called a 'charging order'.

What happens if you leave the UK with outstanding debt? ›

There is a possibility that some creditors won't pursue you for a debt in another country, but this isn't a certainty, and there are other paths they may go down. For example, if a creditor attempts to bankrupt you in the UK, bankruptcy is recognised across most European and international borders.

Does debt get wiped after 7 years UK? ›

The time period between your last contact with the creditor – whether it was a payment made, a letter or a telephone conversation – has been six years, this means that the debt has become “statue barred” and the creditor is no longer allowed to pursue you for payment or take any further legal action against you.

What happens to unpaid debt after 7 years UK? ›

If your creditor has already issued you with a County Court Judgment (CCJ) for an unpaid debt, the Limitation Act (1980) will no longer apply, meaning there is no limitation period. However, if the CCJ was issued more than six years ago, the creditor may need the permission of the court to enforce the debt.

Can a debt be chased after 6 years in the UK? ›

While it's true that many types of unsecured debts cannot be chased after six years, this does not necessarily mean the debt is written off after this time. This is a common misconception. The reality is, a debt is not automatically written off after six years, but it does become 'statute barred'.

What are the dangers of debt forgiveness? ›

Downsides of debt forgiveness

Forgiven debt of more than $600 may be considered taxable income, potentially resulting in a hefty tax bill. Engaging with debt relief companies could lead to additional fees, exacerbating financial difficulties.

What happens if you can't pay your credit card UK? ›

If this happens: Your lender will contact you to demand the missing payments are made. Then if you don't make the payments they ask for, the account will default. And if you still don't pay, further action may be taken, such as employing debt collection agents to recover the money you owe them.

Can I ask my credit card company to forgive debt? ›

While it's highly unlikely that any credit card company will forgive 100% of your debt without it being part of a bankruptcy, you may be able to negotiate a settlement with your lenders in which they forgive a percentage of the balance you owe.

Can you be chased for a UK debt abroad? ›

Can the people I owe chase me for debts in another country? People you owe in other countries can take action to collect a debt, including: Using a debt collection agency in the country you live in. Starting court action in the country you live in.

Can a UK debt be collected in the US? ›

Most of the time, international creditors will have to bring a court action in the United States. Not only that, but in the United States, each state specifies statutes of limitations within which a creditor must file an action to recover debts.

Can you negotiate debt UK? ›

You can try to negotiate lower payments if you are struggling with payments. Creditors may allow you to pay less, but this will be marked on your credit file.

Can bad debt be written off on taxes UK? ›

A deduction for a bad or doubtful debt is to be made in arriving at the profits of the year in which the debt becomes bad or doubtful.

Can you write off paying off debt? ›

Debt Expenses That Can Be Deducted

Though personal loans are not tax-deductible, other types of loans are. Interest paid on mortgages, student loans, and business loans often can be deducted on your annual taxes, effectively reducing your taxable income for the year.

Can you write off debt on your taxes? ›

Generally, to deduct a bad debt, you must have previously included the amount in your income or loaned out your cash. If you're a cash method taxpayer (most individuals are), you generally can't take a bad debt deduction for unpaid salaries, wages, rents, fees, interests, dividends, and similar items of taxable income.


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