What debt solutions cost: fees for DROs, bankruptcy, IVAs and trust deeds

Formal debt solutions are not free to run, but most people in them do not pay the cost as a separate bill. Bankruptcy in England and Wales charges a one-off fee of £680¹. A debt relief order in England and Wales has charged no fee at all since 6 April 2024, when the previous £90 administration fee was abolished². An IVA and a Scottish protected trust deed take their fees out of the monthly payments you make anyway, so the fee reduces what reaches your creditors rather than adding to what leaves your pocket³.

That distinction matters when comparing solutions. Some costs are one-off entry fees you must find in cash before anything can happen. Others are charges built into the arrangement, approved by your creditors and deducted from the pot. And some options, such as a debt management plan from a charity, cost nothing to set up at all³. This page sets out each cost, how it is collected, who approves it, and what a solution can cost you beyond fees: your home, your car and money that arrives unexpectedly.

Fees should never be the only factor in choosing a solution, because the solutions themselves differ enormously: some can write off some or all of your debts, while others repay everything in full⁴. But knowing what each one charges, and when, helps you spot a provider charging for something available free elsewhere.

Debt solution fees at a glance: one-off fees or charges built into your payments

Debt solution costs fall into two broad shapes. The first is a one-off fee paid at the point of application, which is how bankruptcy works in England and Wales: you pay £680 before the order can be made³. The second is a charge built into the arrangement itself. With an IVA, the fees are part of the reduced monthly payments you make to your creditors, so you never hand over a separate cheque⁹. With a protected trust deed, the trustee's charge comes out of the trust deed fund, which is made up of your monthly payments plus any assets or equity included⁶.

A third category is no fee at all. Some debt management companies charge for setting up and running a plan, while others, including debt charities, give their services for free⁷. In Scotland, the Debt Arrangement Scheme includes its fees in the plan and the creditors pay them⁸. StepChange states it charges no set-up or maintenance fees on the debt management plans it provides³.

The table below shows the pattern across the main solutions.

Where a fee exists, it is worth asking what it buys and who approves it. Insolvency practitioners must seek creditor approval for their fees, and those fees are paid out of the assets or payments of the insolvent individual rather than invoiced separately¹⁰. The guide to debt solutions across the UK explains what each solution does; this page covers what each one costs.

Bankruptcy: a one-off £680 fee in England and Wales

In England and Wales, the fee to make yourself bankrupt is £680¹. That total is made up of two parts: a £130 adjudicator fee and a £550 bankruptcy deposit¹. The £550 element goes to the official receiver, the official who administers your bankruptcy¹¹. You pay the whole amount up front, and it is payable whether or not the adjudicator decides to make the bankruptcy order.

The £680 bankruptcy fee in England and Wales, and the two parts it is made of.

The fee is the same whether you apply online or another route is used, and it is one of the few costs in a debt solution that must be found in cash before the process starts. There is no instalment option built into the fee itself, which is why some people wait, save, or take advice on whether a different solution fits better first. The dedicated guide to bankruptcy in England and Wales covers the process step by step.

If a creditor makes you bankrupt rather than you applying yourself, the position changes: the only difference is that your creditors pay the bankruptcy fees for you¹. A creditor petitioning for your bankruptcy also faces its own costs, including £352 for court costs¹². So the £680 applies to a debtor's own application, not to every bankruptcy.

Scotland and Northern Ireland run their own bankruptcy systems with their own costs. In Scotland the solutions include bankruptcy (sequestration), the Debt Arrangement Scheme and protected trust deeds¹³, and the guides to sequestration and the Minimal Asset Process and bankruptcy in Northern Ireland cover those separately.

Debt relief orders: no fee in England and Wales, applied for through an approved intermediary

A debt relief order used to carry a £90 administration fee. Following an announcement on 6 March 2024, that fee was abolished on 6 April 2024, so applying for a DRO in England and Wales now costs nothing². The fee had always been deliberately small: when the scheme was designed, the principle was that applicants would pay a single fee set at less than one third of the cost of the deposit payable to petition for bankruptcy, and consultation responses at the time suggested figures in the £50 to £100 range before £90 was settled on¹⁴. Its abolition removed even that cost.

You cannot apply for a DRO on your own. DROs are made under a partnership between the Insolvency Service and skilled debt advisers, called approved intermediaries¹⁵, and the application must be made through an approved intermediary to the Official Receiver¹⁶. The intermediary does the eligibility checks and submits the application; you do not pay them for this, and there is no fee to route around.

Eligibility limits are part of the DRO's cost in a broader sense, because they constrain what you can own while the order is in force. Official guidance states that if you are under a DRO, receiving redress from a motor finance agreement that would take your total assets above the £2,000 threshold during the moratorium period affects your position¹⁷. Independent guidance adds that payments on a hire purchase or conditional sale vehicle count as an allowable expense only if the vehicle is worth less than £4,000, is needed for a basic domestic need, or is adapted for a disability¹⁶. The narrow guide to debts that cannot go into a DRO lists the exclusions, which include magistrates' court fines, maintenance and child support payments and arrears, student loans, and budgeting and crisis loans¹⁶.

If the DRO runs its course, liability for the debts in it is written off after 12 months¹⁸. The full guide to debt relief orders explains the criteria and the moratorium period.

IVA fees are paid from your monthly payments, not upfront

An IVA costs money to set up and run, but you do not pay those costs separately: you pay your fees through your monthly IVA payment¹⁹. There are no upfront fees, and the fees are deducted from the monthly payment rather than added on top⁵. If creditors do not approve the IVA, there is no charge³.

How much you pay each month is worked out from what you can afford, not from the fees. The monthly payment is calculated by subtracting all of your monthly essential expenditure, such as travel costs, food, utilities and insurance, and any priority debt arrears payments such as mortgage arrears, Council Tax arrears or court fine arrears, from your monthly income from wages, benefits and investments²⁰. The fees then come out of that agreed figure, so a higher fee means less reaches your creditors, not a bigger bill for you⁹.

Where the insolvency practitioner's fees sit at each stage of an IVA, and when creditors must approve them.

The mechanics are set out in independent guidance: the first 5 payments you make go to your insolvency practitioner for setting up the IVA, and after that the ongoing fees are deducted from your monthly payments²¹. Any fees have to be approved by creditors⁵. An IP charges a fee for negotiating with your creditors and managing the IVA²³, and those fees are paid out of the money you contribute each month²¹.

For the IVA to exist at all, creditors whose loans add up to at least 75% of the value of your debt must agree to it²⁴. Official guidance for Northern Ireland says the unsecured debts must generally be at least £15,000, though this depends on the individual creditors²³. The full guide to IVAs covers the proposal, the vote and the term.

Upfront IVA fees: what the warnings say

Independent guidance is blunt about providers who ask for money before creditors have voted: be wary of IVA companies that charge upfront fees, as you may not be able to recover them if your creditors do not agree to your IVA proposal²⁰. The same guidance warns against companies that claim they can get an IVA passed by altering your expenditure to unrealistic levels²⁰. National Debtline's IVA panel firms state that you will not be charged up-front fees and will not be asked to make any payments until the proposal has been agreed by your creditors¹⁸.

The contrast between providers is stark. StepChange states its IVA fees come out of the agreed monthly payment, with no charge on top and no upfront fees¹⁹, and that there is no charge for advice and support before you set up an IVA⁵. Its IVA arm, StepChange Voluntary Arrangements, can set up an IVA with no upfront costs and no charge for debt advice²⁵. A provider asking for several hundred pounds before a creditors' meeting has even been scheduled is asking you to take a risk that reputable providers do not ask of you.

The comparison between free debt charities and fee-charging companies sets out the differences in full, and the guide to telling whether a debt adviser is legitimate covers the checks worth making before you engage anyone.

Protected trust deeds in Scotland: trustee fees come out of the fund

In Scotland, a protected trust deed is the solution most comparable to an IVA, but it has different benefits, risks and fees²⁵. There is a charge for the trustee, and that charge comes out of the trust deed fund, which is made up of your monthly payments plus any assets and equity included in the deed⁶. There are fees involved in a trust deed, but these are deducted from your monthly payments⁶.

The Accountant in Bankruptcy, which administers personal insolvency in Scotland, states the position plainly: your trustee will charge fees for managing the protected trust deed, those fees come from your monthly payments, and they do not affect what you must pay or for how long²⁶. That last point is the practical one for anyone comparing solutions: the fee changes how the money you pay in is divided, not the size of the payment.

A trust deed can stop interest and charges²⁷, which is part of what the fee pays for. Scotland's other formal option, the Debt Arrangement Scheme, works differently: its fees are included in the plan and paid by your creditors⁸, and a debt payment programme under DAS excludes secured debts such as mortgages, secured loans and hire purchase on vehicles, along with Council Tax, rent, rates and utility bills as ongoing liabilities²⁸. The guides to protected trust deeds, DAS and the comparison of trust deeds with sequestration cover the Scottish solutions in detail.

Debt management plans: an informal option with no write-off

A debt management plan is an informal arrangement where you repay your non-priority debts through an affordable monthly payment²⁹. Because it is informal, it is set up without involving the courts and covers only unsecured debts²⁴. It is also flexible: you are not tied into making a fixed payment for a set period, and you can ask for a review if your situation changes²⁹.

The cost depends entirely on who sets it up. Some companies charge a fee for debt management plans while others give their services for free⁷. The three routes are: through a debt charity, which will set up and manage the plan for free; through a debt management company, which may charge fees; or on your own, dealing with creditors directly⁸. StepChange states it charges no set-up or maintenance fees on its plans³.

What the plan cannot do is as important as what it costs. A DMP involves no debt write-off: you repay everything you owe, just more slowly. Creditors may agree to freeze interest and charges and may stop other action like taking you to court, but they do not have to⁷. If they do not agree, they can continue to contact you, ask for payment, or even take you to court⁷. In many cases you will no longer be contacted by creditors or debt collectors, which is one of the plan's main practical benefits⁷, but that is cooperation, not a legal bar.

One protection is worth noting: FSCS protection does not cover debt advice³⁰, so money paid to a fee-charging debt management company that later fails is not covered in the way savings are. The guides to debt management plans, what happens if you miss a DMP payment and whether creditors must freeze interest cover the detail.

What else a debt solution can cost you: your home, car and windfalls

Fees are the visible cost of a debt solution, but they are rarely the largest. Whether you owe £1,000 or £50,000, whether you own your home or rent, and whether you are employed or out of work all affect which solution fits, and each carries its own non-cash costs³¹. Independent guidance lists the questions worth asking before choosing: how long it will last, whether it affects your employment, whether it affects your credit rating, whether it is legally binding on all creditors, whether it prevents creditors taking further action, whether your home is at risk, and whether you have to pay a fee³¹.

Your home is the biggest exposure. Often your debt total must be more than the value of your assets to qualify for a formal solution³², but once in one, assets including property can be used to pay creditors. In a trust deed, for example, the fund is made up of monthly payments, assets included and equity included⁶. If a home is sold by a lender, the resulting mortgage shortfall debt might also include legal costs and estate agency fees where the sale is handled by the lender³³. The narrow guides to home equity in an IVA, whether bankruptcy means selling your home and windfalls during an IVA cover these risks solution by solution.

Your car turns on value and need. As noted above, DRO rules treat hire purchase vehicle payments as an allowable expense only if the vehicle is worth less than £4,000, is needed for a basic domestic need, or is adapted for a disability¹⁶, and DRO asset limits can be affected by money such as motor finance redress received during the moratorium¹⁷. Windfalls, inheritances and refunds are the other hidden cost: money that arrives during a formal solution may have to be paid into it rather than kept.

Where fees and payments can change: reviews, missed payments and failed arrangements

Nothing in a debt solution is entirely fixed. If you stop making payments into an IVA, you break the terms of the IVA agreement and the IVA could be cancelled or ended³⁴. Official guidance sets out what follows: you would need to repay your outstanding debts plus any interest that has built up while the IVA was active, and creditors are no longer restricted from contacting you or taking recovery action³⁴.

The consequences of a failed IVA are severe and worth weighing before signing up. If you do not finish your IVA, none of your debts will be written off, you will have to pay them all back, and creditors will contact you again and can add any missed interest and fees¹⁹. Independent commentary puts it starkly: if your IVA fails, you will be back to square one having paid fees, and at that point the only option realistically available may be bankruptcy²¹. Creditors can also restart interest and charges, including for the period the IVA was in place, and in rare cases may apply to make you bankrupt²⁹.

Reviews work in both directions. Because a DMP is informal, you can ask for a review if your situation changes²⁹, and the same principle of recalculating affordability from income minus essential spending underpins IVA payment reviews⁹. Missed payments on any credit commitment could affect your credit rating, making it more difficult to get credit in the future³⁵. Where an administrative error rather than non-payment is the problem, the Financial Ombudsman Service can tell a firm to pay the missed payments plus interest up to the date of payment³⁶. The guides to missing IVA payments, reducing IVA payments after an income drop and what happens when an IVA fails cover the mechanics.

The costs to your credit file and the Insolvency Register

Every formal insolvency solution leaves a record. It will be recorded on the Insolvency Register and on your credit file⁴, and that record affects access to credit long after the payments stop. The Insolvency Service is not able to correct any information on your credit file: if something is wrong, you must contact the credit reference agency yourself to resolve it³⁷.

Checking what is on your file costs a small amount. Consumers can obtain their statutory credit file for £2 from the credit reference agencies³⁸, which is the cheapest way to see exactly what a solution has left behind. The guide to credit scores and credit reports explains how records age and what lenders see.

The fee side of insolvency has its own checks. Insolvency practitioners must seek creditor approval for their fees, and those fees are paid out of the assets of the insolvent individual whose affairs they are dealing with³⁹. In the hierarchy of how funds are distributed, the practitioner's fees are included as part of the costs of the insolvency process, and those costs sit behind money owed to secured creditors³⁹. Fees can be set as a fixed amount³⁹, which is why asking how the fee is calculated, and getting it in writing, matters before committing. If a fee or a practitioner's conduct is disputed, the guide to complaining about an insolvency practitioner sets out the route.

Free help with choosing and paying for a solution

No one has to pay for debt advice before choosing a solution. You can get free and independent advice on debt management plans, or any kind of debt problem, from organisations such as Advice NI⁷, and the same is true across the UK: StepChange charges nothing for advice and support before setting up an IVA⁵, and free help with the full range of solutions is available through the charities and official bodies listed in the guide to free debt advice.

Official cost-of-living pages signpost the same help. The Scottish Government's cost of living campaign points people to debt and money advice covering solutions including bankruptcy, DAS and trust deeds¹³, and the Welsh Government's cost of living support pages do the same for Wales³⁵. Because advice is free and the solutions themselves differ in cost, the sensible order of operations is advice first, solution second: an adviser can check whether a solution with no fee, such as a DRO in England and Wales², or one whose fees are paid by creditors, such as DAS in Scotland⁸, fits your circumstances before you commit to anything with a charge attached.

The guides to budgeting for repayments, which debts to pay first and the full range of debt solutions cover the ground an adviser will walk through with you, and the comparison pages, including DMP or IVA, IVA or bankruptcy and DRO or bankruptcy, set the main options side by side.