So, you’re heavily in debt, feel like the world is closing in around you, running out of options. Fear not. One option you have is to apply for an IVA (Individual Voluntary Arrangements). What is that I hear you ask? Let me explain.

An IVA is an online organisation which provides advice to people who are stuck in debt problems and also helps strike Individual Voluntary Arrangement between borrowers and lenders to facilitate repayment.

An IVA helps to produce a legal contract between you and your creditors, it is a legally binding arrangement supervised by a Licensed Insolvency Practitioner. The sole purpose of an IVA is to enable you to reach a compromise with your creditors to reduce payments into easy to manage portions and to avoid the consequences of bankruptcy.

The other pros for such an agreement centres on the fact that it’s a private arrangement made between yourself, your advisors and your creditors. No one need know.

With an IVA you make one single payment no matter how many debts you may have with the promise that debt could be wiped clean within a matter of years.

The selling point for this deal comes within the terms of the agreement, which states that you must contribute as much as possible within your budget, which means that you should always be able to afford the monthly payments. So gone is all the stress over what you owe, replaced with order and stability.

Researching an IVA throws up a few advantages. To name one, once an arangement is agreed no further interest or charges can be added to the debt.

Of course there are always two sides to every story. The negatives come in the form of any equity you may possess, be it your house, an endowment policy linked to your mortgage, or valuable assets may be required to pay to your creditors.

Debts under £15,000 means you probably would not be accepted for this service and generally speaking you must be able to afford payments of £200 or more.

Judging from the press written on IVA’s they are becoming more and more popular by the day. According to the latest figures 53% of the professionals know someone who has taken out an Individual Voluntary Arrangement (IVA), but 72% think it is a legalised way for people to avoid paying their debts whilst avoiding bankruptcy.

Leading broker Keith Dearling echos these sentiments but feels that in these credit tightened times IVA’s are becoming more important for those heavily in debt.

"A lot of clients with credit problems that go and see a mortgage broker may in the past have been able to refinance their debts with a sub-prime mortgage, but now with the lack of products and tighter criteria they may find that they need a debt management plan or an IVA. IVA numbers have been widely predicted to increase this year and referrals to debt solutions may also be a way that brokers can earn additional income where income is currently short."