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Debt Cancellation

If you’re in a situation where you are struggling to repay mounting debts, you may be thinking about ways in which your creditors would agree to cancel your debt. While this may sound too good to be true, there are in fact a number of circumstances in which debt cancellation could be an option. However, whether or not this is a realistic possibility for you will depend on your particular situation. The most important thing is that you are aware of your rights as a consumer and you understand all the options available to you, including those that could see creditors cancel debt.

At Galahad & Co., we will provide you with the expert legal advice you need to make sure your interests are protected.

Why it’s important to know your rights

If your debt has reached a point at which you are no longer able to service your monthly repayments, or a collection company is claiming you owe them money you simply cannot remember borrowing, you may believe that a debt management solution such as a debt management plan, individual voluntary arrangement or even bankruptcy is the only way out of your situation. However, this is not the case. Before committing to anything, it is important that you understand your rights as a consumer. Part of this includes the right to have the specific details of your debt broken down to you, with creditors being required to provide hard evidence that proves you actually do owe them the amount they are claiming. If they fail to do this, debt may be cancelled or written off.

It’s important to remember that even if you have been repaying a ‘creditor’ for years, this doesn’t mean that you have ‘admitted’ to anything, including the specific amount they are claiming you owe. That’s why clarifying the exact amount you owe with each creditor, and waiting to see what evidence they can actually produce, is essential. Without this proof, debt cancellation or reduction is a real possibility, and this is where we can help. 

Before any other avenue of debt management is explored, first allow one of our legal experts at Galahad & Co. to assess your case. In many instances, debt collection companies and creditors cannot provide sufficient evidence relating to the amounts they are claiming are owed, or even that you owe them anything at all. When this is the case, your creditors have no choice but to cancel debt, or reduce it to a smaller amount which they have provided evidence for. Challenging irresponsible lending practices has seen us save our clients over £3 million.

Other grounds for debt cancellation 

Although it’s not common for creditors to cancel debt if they can prove you do in fact owe the amount they are claiming, there are a number of exceptional circumstances that could be grounds for debt cancellation. If, for example, you have no money to make repayments and have no significant future income to arrange a reduced repayment plan, creditors may agree to write off what you owe. However, typically this will only happen if you are classed as a ‘potentially vulnerable customer’ by your creditors. This may be because you are no longer able to work due to injury or disability or if you have been diagnosed with a terminal illness. However, it is worth noting that even in these circumstances, debt will usually only be cancelled in full if you don’t own any valuable assets that could be repossessed and used to repay the debt. 

In practice, even in these extreme circumstances, many creditors may be more likely to agree to write part of your debt off (usually the interest and charges), rather than cancelling your debt all together. This would mean you may still have to agree to repay the outstanding amount in a lump sum or in agreed monthly instalments. 

Using debt solutions to cancel debts

If your creditors have been able to provide evidence of exactly what you owe them, and that amount is still more than you are able to realistically service, you may want to consider entering into an insolvency debt solution. Providing you follow all of the rules and conditions of your specific agreement, this may see remaining debts cancelled after a set period of time. However, it’s important to remember that debt solutions do have significant drawbacks and should only ever be considered a last resort. Solutions include:

Debt management plan: Not legally binding like other solutions, a DMP is an informal agreement between you and the companies you owe money to. Typically involving non-priority debts – credit cards, store cards and loans – you simply pay back debt in one set monthly payment, which is divided between all creditors. DMPs are usually managed by a DMP provider and must be approved by all creditors. They can be cancelled by you or your creditors at any time.

Administration order: Issued by a judge and legally binding, an AO allows you to make a set monthly payment to the county court, which will then distribute it to all of your creditors. AOs prevent creditors from placing any further demands on you as the debtor. To be eligible for an AO, you must have two or more debts amounting to over £5,000 and an unpaid county court judgment (CCJ).

Debt relief order: An option if you don’t own a home and have debts under £20,000 that you can’t afford to repay, DROs stop creditors from placing any further demands on you and allow you to make a new start free from your debts once they are completed. Typically lasting one year, DROs require you to comply with various conditions for the duration of your order and they will negatively impact your credit rating.

Individual voluntary arrangement: An IVA is a legally binding agreement in which you agree to repay your creditors over a defined period of time. Issued by a court, an IVA can be flexible to suit your specific needs and if the payments you make don’t fully repay your creditors by the end of the agreement, you won’t be liable for the remainder. However, these agreements do come with drawbacks. Although debts will be frozen while you make repayments over a set period of time, you have little control over the payments you need to make and the fees paid to your appointed insolvency practitioner will typically be high.

Bankruptcy: A final resort, you can apply to a court for bankruptcy if you have debts that you have no realistic chance of being able to repay. This court approved solution will stop creditors from chasing you and prevent further interest being added to your debts. Typically lasting a year – in which time you will be expected to fully cooperate with the courts and your appointed Official Receiver – bankruptcy will lead to your debts being written off. However, there are drawbacks of bankruptcy. Possessions such as properties and vehicles could be repossessed, as well as other non-essential belongings of significant value, and you will be banned from working in certain financial roles or being the director of a company for a set period of time.

How can we help?

At Galahad & Co., we can provide you with specialist legal advice needed to challenge a lender. We’re here to stand up for you and protect your rights as a consumer against creditors who may try to exploit you.

For a free, no-obligation consultation with one of our experts, simply contact us today by phone on 0330 124 4252 or email us at

Are you ready to assert your rights?

In situations where you may have been struggling to meet debt repayments and have missed payment deadlines the company with whom you took out the debt will often sell it on to a third party who will then, using a variety of techniques, chase you for the outstanding amounts.


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Thanks to Galahad & Co., I was completely freed from over £250,000 of debt in just one year!” – Luke Thomas

"Thanks to Galahad & Co., I was completely freed from over £250,000 of debt in just one year!"

“This changed my life! Galahad & Co. sorted all my debts and gave me back my life. I’ll be forever grateful.” – Mrs Thomas

Galahad & Co. sorted all my debts and gave me back my life. I’ll be forever grateful.

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