An IVA is an attractive alternative to bankruptcy – it's a chance to wipe out up to two-thirds of your debts and pay the rest back in monthly repayments for a fixed period. You don't have the stigma or repercussions bankruptcy can hold. And today, the massive increase in consumer debt in the UK means more borrowers than ever have to face up to the hard choice of deciding between an IVA and bankruptcy.

IVA demand set to boom

Demand for debt management solutions such as the IVA has risen in line with record levels of debt. The number of personal insolvencies in 2006 peaked, exceeding the 100,000 mark for the first time in the UK. Such scale of debt was previously unprecedented in the UK, but as a nation we quickly have to come to terms with our over-borrowing. Seeking a positive debt management plan by taking out an IVA is therefore more sought after than ever.

IVA and debt management

The increased interest in IVA and debt management schemes is a result of more people falling into debt because of:

• A decade of easy credit
• Putting everything on plastic; knowing you have an overdraft, credit card and overspending
• Five hikes in interest rates in 2007 that impacted heavily on those already paying off debt
• The end of millions of homeowners fixed rate mortgage contracts, resulting in higher repayments
• The general over inflated cost of housing that sees first time buyers commit over 30% of their income to their mortgage.

IVA – budget planning

An IVA offers the chance to become debt-free and is also good practice for future finances. Paying back an IVA means you are expected by your creditors to live on a tight but manageable budget. Although once your IVA is paid off, you're free to spend your money on whatever you choose, the budget planning you'll experience during the IVA is good practice for managing your finances and avoiding falling into debt once more. Working out your expenditure and income is crucial if you want to pay off an IVA. Get it wrong and you could end up being forced into bankruptcy.

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.