Mortgage Information After Debt Solutions

If you have previously used a debt solution such as an IVA, debt management plan, bankruptcy, or a Debt Relief Order, it is common to worry that a mortgage may no longer be possible. In reality, many people are accepted for mortgages after resolving past credit issues. Outcomes usually depend on how long ago the debt solution completed, how your recent financial conduct looks, and your overall financial position.

Mortgage Bridge provides clear information to help you understand how different debt solutions are commonly viewed by lenders. Where appropriate, we can introduce you to an FCA-regulated mortgage adviser who can provide regulated advice.

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Can you get a mortgage after using a debt solution?

Yes, lenders may consider applicants who have previously used:

• Individual Voluntary Arrangements (IVA)

• Debt Management Plans (DMP)

• Bankruptcy

• Debt Relief Orders (DRO)

• Debt negotiation or partial settlement

• Informal arrangements with creditors

Each type of debt solution has different waiting periods and lender criteria.

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How lenders typically assess different debt solutions

Although criteria vary, lenders often assess each debt solution in the following ways.

1. Individual Voluntary Arrangement (IVA)

Lenders usually consider:

• Whether the IVA has completed

• The completion date

• Whether defaults occurred before the IVA

• The applicant’s financial conduct since completion

General guidance only:

• During the IVA: Very limited options

• Within 12 months of completion: Specialist lenders only

• 1 to 3 years after completion: Broader options

• Over 3 years after completion: Significantly more flexibility

2. Debt Management Plan (DMP)

DMPs are often viewed more flexibly than other debt solutions because they do not involve formal insolvency.

Lenders may look at:

• Whether the DMP is active or completed

• How long it has been in place

• Whether missed payments occurred before or during the plan

Older or completed DMPs are generally easier for lenders to consider.

3. Bankruptcy

Bankruptcy is usually treated as one of the more serious forms of adverse credit, but mortgage applications may still be considered after discharge.

Typical timeframes:

• During bankruptcy: Not considered

• Under 12 months post-discharge: Very limited options

• 1 to 3 years post-discharge: Specialist lenders available

• Over 3 years since discharge: Wider lender choice

Recent account conduct and income stability are usually key factors.

4. Debt Relief Order (DRO)

A DRO restricts borrowing during its active period. After discharge, assessment timelines are often similar to bankruptcy:

• Under 12 months post-discharge: Specialist lenders only

• 1 to 3 years post-discharge: Improving options

• Over 3 years post-discharge: Greater flexibility

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Other factors lenders commonly assess

1. Deposit expectations

Deposit requirements often vary depending on the debt solution and how recent it was. General guidance only:

• Around 10% may be possible a few years after completion

• Around 15% or more is common for more recent solutions

• Around 5% may be possible for older, settled cases

Some schemes may allow lower deposits, depending on individual circumstances and lender criteria.

2. Recent financial conduct

Lenders typically want to see:

• No new missed or late payments

• Clean recent bank statements

• Low credit utilisation

• All current commitments up to date

Consistent recent conduct is often critical.

3. Affordability and income stability

Stable and provable income can help offset historic credit issues. Lenders commonly review:

• Employment or self-employment income

• CIS or contract income

• Length and consistency of earnings

Clear income evidence is usually important.

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Steps that may help before applying

Steps that may help strengthen a profile include:

• Obtaining a full multi-agency credit report

• Ensuring all active accounts are up to date

• Keeping recent bank statements free from issues

• Reducing reliance on overdrafts

• Settling remaining debts where possible

• Preparing income documentation early

These steps can help lenders better understand how financial behaviour has changed since completing a debt solution.

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How Mortgage Bridge supports you

Mortgage Bridge provides information to help you understand how lenders commonly assess applications following debt solutions. We do not provide mortgage advice or recommend lenders.

Where appropriate, we can introduce you to an FCA-regulated mortgage adviser who can review your circumstances in detail and provide regulated mortgage advice.

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Next steps

If you have previously used a debt solution and want a clearer understanding of how it may affect a mortgage application, Mortgage Bridge can provide information and, where appropriate, introduce you to an FCA-regulated mortgage adviser.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

Related Guides

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Credit Repair Guides

Practical steps for rebuilding your profile after completing a solution.