Debt Solutions

You'll be able to apply for an IVA if you live in England, Wales or Northern Ireland, but not Scotland. The nearest equivalent in Scotland is a 'trust deed'.

A trust deed lasts for four years, and is similar to an IVA in that you'll pay off your creditors over that period, and any debt remaining will be written off.

You'll need to find a local Insolvency Practitioner to administer your debts. Any of the professional debt advice charities will be able to advise you on whether a trust deed is right for you, and how to find a local IP.

If you've got a car and can show that you need it for work, you're unlikely to have to sell it. Yet if you're in the middle of paying the car off under a hire purchase deal, you can't include this debt in the IVA, as the finance company could just repossess the car. When the finance deal ends you'll need to pay the extra money into the IVA instead.

If you have any savings you'll probably have to hand these over. Plus if you have an endowment policy (a life insurance policy) linked to your mortgage you're likely to be asked to cash it in and add the proceeds to the arrangement.

If your financial circumstances change you'll need to tell your supervising Insolvency Practitioner during the IVA period.

They'll also reassess your income and expenditure at least every year to make sure that the monthly payments are still the most you can afford to contribute. If your income increases your IP can ask for the extra money to be added to your monthly payments.

Unfortunately, your IVA is likely to have a clause which says any windfalls, such as lottery wins, bonuses, gifts or inheritances, also have to be declared to your supervisor and paid into your IVA.

This will happen even if you inherit an amount of cash greater than the amount you're due to pay back under the IVA, as it's a reduced amount. If it meant you could then afford to clear all your debts (at the original levels), you'd have to do so.

If your financial situation gets worse, for example, you lose your job or fall ill, you'll need to let your Insolvency Practitioner know as soon as possible. Failing to even make one of the payments could ruin the arrangement and mean your creditors come after you again.

In an emergency it's possible you might be able to miss up to two payments, but you'll need permission from your IP and creditors. If you miss payments without it then you'll be considered 'in default' and could then be made bankrupt, meaning you could lose your home.

If the change in situation is permanent, then in some cases your IP can work out what you can now afford and, if necessary, ask your creditors to allow you to make a lower payment. However, there's no guarantee they'll say yes.

Most Insolvency Practitioners are accountants or lawyers, but whatever their background they must be licensed by one of the chartered accountancy bodies; the Law Society, the Insolvency Practitioners Association or the Department for Business, Innovation & Skills.

StepChange Debt Charity has an IVA arm – StepChange Voluntary Arrangements. Its fees are on the low side, but get a few 'quotes' – the lower the IP's fees, the more goes to your creditors, the more likely the IVA's approved.

Your local County Court and Official Receiver's office should be able to give you a list of Insolvency Practitioners. Alternatively, you can use The Insolvency Service website to find one.

Some debt management companies offer to put you in touch with an Insolvency Practitioner for a fee, but you don't need to. You can contact an IP directly, and that way you'll only pay one set of fees.