Facing insolvency can be very frightening indeed; particularly if you are like the majority of people who become personally insolvent, where circumstances have seemed to work against you. Most people look after their money and don't get into debt that they can't afford to pay back. What gets you into trouble is when you suddenly lose income or have to cover an increase in expenses. You may be bereaved and lose a substantial income, but still have mortgage payments to meet and bills to pay. Or you might be unwell, and need 6 months or more off work at a reduced salary in order to recover.

Prevent personal insolvency

The last thing you need is to be insolvent, especially if you are also dealing with a difficult personal situation. The most sensible thing to do, of course, is to talk to your creditors as soon as you know you are going to have trouble with your payments. Many lenders are prepared to offer you a payment holiday, or the option of reduced payments until your personal circumstances are sorted out. You may think it's best to sell your current home and buy something smaller and more affordable. This will allow you to release the cash that's tied up in your home and you can use the surplus money to repay your debts. There's no doubt that talking to your lenders is a better route than avoiding them.

If you've been unable to do this, and your debts have got to the stage where insolvency is the next step, consider taking out an IVA. A growing number of people are choosing this route, and although creditors are becoming more strict about who they accept on an IVA proposal, it could still be the best way forward for you. At least 75% of your creditors need to agree to the proposal and if they do, you can commit to a five year period of monthly payments in order to clear your debts. These payments remain the same all the way through the IVA term, and you can knock insolvency on the head simply by being organised enough to make sure you can make this single payment each month. An administrator takes the amount you pay and divides it up between your creditors. At the end of the period, your debts are treated as cleared.

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find an insolvency 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.