If you’re in debt, it’s easy to be seduced by IVA advertisements offering debt help and an easy way out, but be warned, these companies are looking to make money from your frustration. There is no easy way out of debt or the possibility of bankruptcy , you have to consider all your incomings and see exactly what you’re wasting and where you can make cutbacks. You need to see what interest you are being charged and work out clearly who you owe money to. No company is going to find a ‘little known legal loophole’ to give you a cause to not pay. These companies are just trying to reel you in to pay for their services.

If you are honest with your creditors when you find yourself in financial difficulty, they are far more likely to treat you fairly. You may find yourself paying a reduced rate of interest whilst a debt is cleared, and even be able to offer a reduced lump sum to clear it sooner. Hard work is the key to paying off debts; not wishing on stars and wasting time on schemes like this.

There are some excellent debt charities, such as CCCS, who offer free debt counselling and advice. They will help you work out a debt-repayment plan for free. If you’ve run up debt, you have a simple moral obligation to tighten your belt and pay it off.

It is possible that an IVA could right off 75% of your unsecured liabilities, but it is likely that the people would stand to benefit from this kind of reduction are better favoured by bankruptcy anyway.

Those who have a relatively low paid job and no property could almost certainly get away with paying about 25% of their debts plus insolvency practitioner fees - still more than 25% though. Creditors would be happy to get anything from this debt and have probably virtually written it off in the first place.So rely on ISA savings or speak to a debt adviser.

If you have a well paid job, home etc you are highly likely to have to repay most of what you owe. Whilst an IVA does potentially allow you to right off some debt, it is more of means of returning order to your finances as it helps you balance the books. The IVA will end after 5 years and your credit rating will be completely clear after 6 years providing you with a fresh start.