In the U.K., people having problems managing their debt have an interesting option that we don’t have here in the States. They can make what is called an
IVA, or Individual Voluntary Arrangement with their creditors to pay back a percentage of their balance, and in exchange, their creditors agree to write off the remaining balance. The IVA shows creditors the person’s financial situation and how much they can reasonably pay back within a certain term, no more than five years, and then provided the creditors agree, all debts are included in the arrangement, and the creditors agree to take no further action.

Having been through a bankruptcy, I wish this solution had been available to us. There are debt consolidation companies that say they do something similar, but my experience with them is that they often don’t actually make the monthly payments to the creditors as agreed. When I worked at the credit union, we saw people all the time who had damaged credit because the debt consolidation company didn’t stick to the agreed arrangement. I assume that an IVA does less damage to the person’s credit report than a bankruptcy does, and that at the end of the repayment term, the person is able to obtain credit at regular rates. The IVA takes into consideration how much the person’s family needs to maintain basic living expenses, and if that changes at any time, the IVA can be rewritten to take any new circumstances into consideration. W3 Debt Solutions offers this service with no upfront charge, and takes their fees from the monthly payments made to creditors. What a great alternative to bankruptcy! The person using the IVA gets peace of mind knowing they are still making payments towards their debt, and the creditors still get some of the money they are owed. As long as the payments are made to the creditors as agreed, it gets the person back on track to being out of debt.

helpful information: Whether looking for a debt solution for paying debt off or considering a debt capital for your business, you need to be well certain of the expected circumstances. It’s preferred to consult a financial advisor for the purpose to better educate you about the bankruptcy law in case you fail to pay off. It avoids you the hassle to look through the loans for bad credit once you couldn’t pay the debt off. You must also be aware of the fact that it’s not like public debt that you will get renewed or granted with comfortable installments option.

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