For many people, insolvency and bankruptcy go hand-in-hand, especially when it comes to businesses. It's true that when you get to the point where your debts far outweigh your income, there aren't many options left open to you, but for those with personal debt problems, insolvency doesn't necessarily mean bankruptcy.

Insolvency, not bankruptcy . . .

Insolvency is becoming more common than you might think. A growing number of people have personal debts that are bigger than their incomes and which they can't pay off, because they simply don't have enough money. Credit cards and store cards in particular carry very high interest rates, and so they debt grows by 15% or more every month. How can you keep up with payments at that rate? When you get to the point where there's no hope of paying your debts, that's insolvency. Bankruptcy, however, is not the only solution. You could look at an Individual Voluntary Arrangement, also known as an IVA. This might help you to regain control over your finances.

Why the IVA is a better choice

An IVA is a serious solution to a serious problem. It's certainly preferable to bankruptcy, but that doesn't mean that it should be taken lightly. The purpose of the IVA process is to help people with high levels of personal debt avoid bankruptcy, which can have a severe long-term effect on you, your family and your finances. An IVA allows you to clear your debts over a five-year period, with agreement from your creditors. If you speak to an insolvency specialist, they will be able to help you start the IVA process. In fact, once you decide to go ahead, your insolvency specialist will do most of the work for you, including:

• Inviting your creditors to an IVA meeting
• Asking each creditor for an agreement to go ahead with the IVA
• Negotiating a monthly payment for each creditor
• Handing the administration and payment for the term of your IVA

In effect, once the IVA has been agreed, all you need to do is ensure that you can make the monthly payment required of you. You will pay it to your insolvency adviser, and they will split it up between your creditors. It's a five-year commitment, but one that most people find preferable to the public loss of control that bankruptcy brings with it.

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.