The amount you repay on a fixed period is worked out by assessing your monthly income and disposable income, from this it can be agreed what you are to pay back. There are IVA pros and cons.

One good thing is that in agreeing to an IVA from that point no more interest shall be charged to it as it is frozen at the point you agree, also this agreement can reduce the amount you have to repay, up to 65% in some cases!

The IVA is a very good idea by the looks of it, as long as you keep your agreed payments and do not fail to meet the conditions legally agreed to.

Your creditors will not suddenly demand extra payment as by law they cannot ask more from you than what was specified in the IVA. This applies to the creditors as much as to yourself.

In summary I think the IVA is a very good idea and not something which is likely to worsen a situation. If you think about it you are formally setting down to repay debt. Also you are doing so with a level of protection you could not get elsewhere. But, the major bonus would be that without such a thing it could be likely for the person to have to declare bankruptcy which only serves to bring bad news in the future. An IVA can work.

Communication will be provided to you by your creditors, DO NOT IGNORE IT. Open letters you receive, take notice of the figures and dates mentioned, along with any proposed actions or deadlines for action. A ‘Head in the Sand’ approach is no good. This won’t go away, it has to be addressed – you have to find a debt solution!

Communication from yourself to your creditors is also vital. Reply to their correspondence, discuss your situation with them, ask them questions, ask their advice, deal with them in a reasonable manner and chances are they are more likely to reciprocate in a similar way. Ask for debt advice – there is plenty available.

Communication between yourself and your partner, (if you have one), is the most important of all. You can’t go into this alone, you can’t hide it away thinking it’ll all go away or that you can handle it. Couples in debt need to be open and attack it together. Working as a team will not only halve the workload but will remove a lot of the stress from the situation –debt can affect your health.

Writing a SOA (statement of affairs) is the first crucial step to ensuring that you do not get into debt. Write down absolutely every bit of income, including benefits and any maintenance payments. Then make a full list of all outgoings. Don’t forget to apportion annual costs such as holidays and birthdays. This budget should give you a reasonable idea of your current status in terms of whether you are living beyond your means.

If you have sufficient income left over but never seem to have any money, it can be helpful to keep a spending diary for a week or two detailing everything you buy. You’ll be surprised how much that sneaky coffee on the way to work adds up every day!

If you simply do not have enough income to pay for your expenses you have two basic options; increase your income or decrease your expenses. A combination of the two should work to bring you within your budget. If you can, try to arrange for some form of debt reduction.

With debt, ignoring the situation is guaranteed to make it worse. Get debt advice, keep on top of your situation and you will be surprised how quickly things turn around!

Bankruptcy is a decision that should not be taken lightly though as there are certain consequences when you declare yourself bankrupt. You will need to be prepared to lose certain valuable personal possessions in order to help pay off the debt. You will have to go to court and your money problems will become public knowledge and this can often be stressful time.

As well as losing material items, you also lose the right to be the director of a company, a member of parliament, a member of local authority or a lawyer.These factors need to be taken into consideration, especially if you dream of one day owning your own business.

If you become bankrupt then you will find it difficult to obtain credit in the future. Your credit history will stay with you for many years and simple things that you will have taken for granted in the past such as taking out a mobile phone contract agreement may prove impossible.

An IVA is a formal agreement with your creditors where you make reduced monthly payments and generally after five years, the rest of the debt is cancelled. This is a way of paying off up to 65% of your debt at a sensible rate and you will not have any privileges or possessions taken away from you. It is a private arrangement so no one but yourself and the people that you owe money to need to know about the IVA if you wish to keep it that way.

Bankruptcy is a quicker way out of debt, but you should only choose this option once you have thoroughly weighed up all the pros and cons as you cannot reverse it. An IVA will take longer to get yourself out of debt, but you have more control and it is kept private.

Gone are the days when people saved up for a holiday, car or even a new TV set. We prefer to calculate the monthly payments and buy the product straight away. Sometimes we spot a fantastic never-to-be-repeated bargain. This is fine as long as we can reasonably afford the item and don’t become too greedy when we see other expensive items which we want.

However, when problems arise, such as redundancy, illness, or breaking up with a partner, the level of debt on credit cards or loans can appear quite alarming. In these circumstances it’s important to keep on top of finances and contact your creditor straight away, informing them about what is happening. If kept informed most financial firms will do their best to help by either reducing payments temporarily, or allowing you to take a payment holiday.

Sometimes relatives will happily help out with family debt. Lending from parents, for example, can be a great idea as they are usually quite flexible about repayments. They rarely charge interest and are often quite easy about when the debt needs to be repaid. It’s best though not to take advantage of their good nature and attempt to make regular repayments

Check your bank and credit card statements regularly and ensure all transactions are correct. Don’t just push statements in a drawer unopened, being too scared to look at the balance. The most important thing is to keep on top of how much money you owe along with the current interest rate of your loan(s).

If your credit rating is good you may be in a position to transfer existing debts to a new credit card with 0% interest rate. This is a good idea if you will be able to repay the loan within the specified period (6 or 9 months usually), and are responsible enough not to spend on the card. Otherwise the interest rate on this type of card can become alarmingly high.

If you find yourself regularly unable to meet existing loan payments, it’s best not to panic. Consult the Citizens’ Advice Bureau which has debt counsellors who will help you to sort out your existing commitments, and advise accordingly. They will even negotiate with your creditors and try to work out repayment plans suitable to both parties.

However, as long as we behave responsibly, a sensible level of debt can be built into most budgets. Most families would find it difficult to live without the occasional loan, especially now as Christmas is almost here.

I found out quickly that there were no miracle solutions and that it would take time, patience and a long slog to get back on track.  Lump sums off my arrears were not an option and I found that even earning a few extra pounds here and there would soon add up to something worthwhile.

At the start, I had a large credit card bill, a car loan, an excessive mortgage and all the regular household bills that you would expect.

I started by making a really good budget planner and detailed on it every last penny that I was paying out. Then, by working my way through the list I painstaking shopped around for the best deals that I could find until I had reduced nearly all my outgoings.  Making savings of £1, £2 or even £5 a month doesn’t seem like much, but when you look at that on an annual basis it quickly accumulates to something worthwhile.

Once I had my monthly outgoings to a point that I had cut them down to the bare liveable amounts, I started to look at ways that I could earn a little extra.

Then along came the wonderful world of eBay, I started selling off my old junk and after paying postage and their fees I was finding that again I was only just breaking a profit and no more. It went on like this for nearly a month until I had saved up enough in my PayPal account to buy a job lot of items that I then sold individually.

In addition, I was car booting the bigger items that I had cleared out my home, every penny was one little step closer.

I became terribly mean for a short time and I was saving up my ones and twos in a jar, walking with my head to the pavement for extra coppers and even raiding the back of the sofa every month.

Before I knew it, I was soon making overpayments to my loans and my credit cards which I had transferred onto 0% finance options.

I found some additional income ideas from the forum that saved me from bankruptcy and I was prepared to give pretty much anything a go. It’s all about having a can do attitude and a burning desire to succeed.

Two years later, I am debt free apart from my mortgage and it’s all down to looking after the pennies and letting the pounds look after themselves. It really is the best feeling in the world.

Fear is the usual reason to lie to a partner, what will they do, what will they say. If you do not like confrontation then do not get into debt or deception will be used to avoid it – at any cost.

Its the age we live in – credit cards, loans. Right now it has been realised what problems its all causing and the banks and loan companies are pulling back, in fact they are now in trouble and trying to borrow to keep themselves afloat, which in itself is causing huge problems for ordinary people with mortgages – the circle of debt!

First and foremost kids tend to learn by observation and imitation. Its not enough to say do I as I do not as I say, ideally what parents do and what they say should be consistent otherwise children will not learn the correct behaviour, so if you are constantly preaching about the importance of living within your means but behave in a spendthrift fashion you are obviously sending a confusing message to your children.

Simple things like making children do chores for their pocket money rather than just handing them their allowance can inculcate a better appreciation of the value of money. Discussing basic financial matters with your children and the importance of saving regularly can help them develop beneficial habits that will last a lifetime. If there is an item that they particularly want you can develop a savings plan with them so that they set aside a portion of their allowance each week until they have reached their target. Giving in immediately to a crying child in the supermarket or toy store may bring respite in the short term but this type of instant gratification is not good for the childs long term development.

Most of the suggestions above are just common sense however implementing them consistently is not an easy job but if you can manage it you can look forward to a stress free retirement courtesy of your wealthy offspring!

The promise of 75% of your debts being written off is entirely dependent on your circumstances. If you can afford to pay off 50% your creditors will not allow you to take 25% and walk away, and you would be expected to pay back what you can afford. Banks are increasingly asking for a higher percentage payback and more realistically you can expect creditors to not accept much less than 60% of the total debt owed.

Many of the new firms are adding large expenses to these arrangements, which means that you are generally paying off the company a large amount for the first payments before they have had their fees and the rest goes to your creditors. This will affect the offer made to your creditors although you would usually see this added to your account and you would not expect to pay any more than already discussed. If you miss the IVA payments, you can be declared bankrupt and those charges added to your bankruptcy.

So an IVA is not really the best of the debt solutions for everyone and is often “too good to be true”. It can only really be considered if your only other option is bankruptcy and even then those that really can help, charge you a lot for the service.

Many people hide the truth from their partners and families, thinking they can get out of the situation. Some become ill and this in turn leads them to shove it under the rug and hope it goes away. It doesn’t and it doesn’t do any good, most likely, only make matters worse.

I haven’t lied about it. But I didn’t say the problems I have had. I waited a long time before talking it over with my girlfriend. I think this is a case for most people.

It really does help to talk, just to get things off your chest and as the saying goes, “a problem shared is a problem halved”. Talking can help with stress and give you ideas. And there are places out there that can help.

So, don’t clam up. If you are in trouble, look around, there is always someone out there who can help you.