What is an IVA? The latest in a long line of Three Letter Acronyms put there to confuse us. And to tell us there are choices, even when we think we’re way out of our depth. But even when you decode it to Individual Voluntary Arrangement, you’re typically none the wiser. What doe it mean? Can it help? Is it a con? I’m as big a sceptic as they come, but I’m prepared to accept that IVA is a good way out for those in really sticky situations with their finances.

And it’s not a new thing - it’s been part of the insolvency act of 1986, so it’s well into its young adulthood by now, and starting to see plans for further reform to allow accessibility for a two-tier system, for differing levels of debt. So where’s the catch?

The catch is, in simplest terms, that you have to be severely in debt to end up needing one. And it’s not a get-out-of-jail-free card by any means - your credit rating will be destroyed, your self esteem will be pretty low, and you’ll have had to fight to keep your house, car, anything of value, just to get into a situation to need one. But the IVA is there to help you when things really are desperate. It allows you to write off up to 75% of your debt, and rehabilitate yourself with the reduced repayment, without having to declare bankruptcy, and start your life all over again.

So if you’re in a position of needing such drastic financial support, get some advice about the option of an IVA - don’t assume bankruptcy as your primary option. And do a bit of hard thinking about how you’ve ended up in this position, or it’s hardly going to help you at all. Cheerful stuff!