If you live in the UK and have debts of ?10,000 or more, then a government sanctioned scheme known as an IVA (Individual Voluntary Arrangement) may be a solution to your debt problems. An IVA may allow you to write off up to 75% of what you owe, whilst paying back the remainder in affordable monthly payments, over a certain period of time - usually 5 years.

An IVA is drawn up by a licensed insolvency practitioner. They work with you and your creditors to come to an agreement to pay them a reduced amount instead of the full amount of what you owe. Based on your disposable income each month - the amount of money you have left over once essential living needs are met, the insolvency practitioner will agree with you a single monthly amount which you will pay each month into the arrangement for the period agreed - usually an IVA runs for 60 months. The monthly amount is fixed for the period of the IVA (unless agreed otherwise) and is often just a fraction of what you have been paying out every month to your creditors. The insolvency practitioner will then negotiate with your creditors to get them to accept the IVA plan - once agreed the contract is legally binding and all interest and overdue charges on your debts are stopped and creditors are prevented from harassing you.

In order to qualify for an IVA, you need to have debts of ?10,000 or more, owe 3 or more creditors and have a regular monthly income.

The first step in applying for an IVA is to contact a reputable IVA firm. Fill out the IVA application form - giving as much detail as possible about your income and outgoings - this will speed up the time it takes to process your IVA. Once your application has been received it is passed to the Insolvency Practitioner who will draw up an IVA agreement.

One of the concerns facing many people with debt is whether or not their home will be repossessed. Under an IVA arrangement, your home is safe - however if there is a great deal of equity in the property you may need to release some of the equity into the agreement, however you can remain in your own home, safe from repossession.

Another concern some people may have is whether an IVA will affect their credit. Under an IVA plan, your ability to obtain unsecured credit over ?500 may be affected - however unlike bankruptcy having an IVA does not automatically disqualify you from getting a mortgage or a secured loan, although it is likely that you will have to apply for adverse credit products.