A formal and legally-binding agreement between you and your creditors, to pay back your debts over a period of time is known as an Individual Voluntary Arrangement (IVA). An IVA must be set up by an insolvency practitioner.
IVA's can be flexible to suit your needs but they can be expensive and there are risks, such as the impact they may have on your credit rating and ability to access future credit. This page provides you with more detail.
If you have an IVA you may find it difficult to get credit in the short term. However, you may still be able to get credit for personal household goods and services.
If you own your own business, then you may be able to get credit for business goods and services. However, you may be charged higher interest rates. This could cause you to get into more debt.
If you want to get more than £500 of credit you must get written permission from your insolvency practitioner. An exception would be if the credit is for public utilities such as water, gas or electricity.
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IVAs are kept in a public register called the Individual Insolvency Register. Details of your IVA will stay on the register for the length of the IVA. Three months after the IVA has ended, they will be removed. When you apply for credit, the creditor may check this register.
Your credit reference file will also contain details of the IVA, which will be held by credit reference agencies. Creditors will check your credit rating, via your credit reference file, before agreeing to lend to you.
Your details will be removed from the Individual Insolvency Register three months after the IVA has ended. Details of the IVA will be held on your credit file for six years. This begins from the start date of the IVA.