We are living in hard times. Debt problems are getting bigger and it is more and more difficult to get out of them. It can happen that problems push a man to use bankruptcy.

Bankruptcy is not good, but luckily there is another alternative that can help in this situation.

Have you heard about the IVA? An IVA, or individual voluntary arrangement, is a solution for those who do not want to file bankruptcy. This is an agreement that cuts all your debt and makes possible the repayment in only five years. The procedure starts with negotiating. Your creditors have to agree with the terms of this solution, otherwise it cannot happen.

Creditors will offer you a sum that you have to repay in five years. This sum is smaller than all your debts together. This sum will be a sum that you can afford to pay with you income in every month. This can be a very big help for you, especially if you had some problems that changed your income. IVAs are only available in England, Wales and Northern Ireland. In Scotland the equivalent to an IVA is a Trust Deed.

An IVA is legally binding. This means that your creditors cannot change their minds and change the sum you have to pay. Once the agreement was made, there is no way back. This is true for both sides. If you fail to pay even this smaller sum of money, you get yourself in real deep trouble. Creditors can keep their word, but you have to make sure before you use this method that you are, too.

There are some requirements you have to meet in order to get an individual voluntary arrangement. First of all you have to be in big financial trouble. This means that you have to have a debt higher than a given sum and an income that cannot cover the debt. If you meet this requirement, creditors are curious if you have income at all. They have to make sure that you repay their money, or at least a part of it, so you have to have a stable income. Another thing creditors will look upon is your credit history. If you have a bad credit report, your chances are low to get an IVA.

An IVA is good especially for those who have to pay after a property. With bankruptcy they would lose this property, so an Iva is a very good solution for these cases. Otherwise an IVA leaves marks on your credit report and it also ruins your life a bit. Use it only if you are in really big trouble.