For many people, an individual voluntary agreement also has several major advantages over bankruptcy.  The single largest benefit would be not having to lose your family home.

I will outline some more of the advantages below, if you have any questions please post them in the comments and I will do my best to answer them – but please take independent advice before you act on anything.

Fixed term agreement – an IVA cannot be for a term longer than 60 months. Providing you stick to the agreement, you will be free of debt within that time period.

Privacy – unlike bankruptcy, it will not be published in newspapers, shielding you from any embarrassment with employers or family.

Write off part of the debt – At the end of the IVA, the creditors are obliged to write off any outstanding balance, provided you have stuck to the repayments.

Protection from legal action – Once an IVA is entered into, creditors cannot take legal action against you. They are also prevented from even contacting you.

Legally binding agreement – Once an Individual Voluntary Agreement has been agreed, creditors cannot insist on any changes being made.

Professional solution – Some people cannot resort to bankruptcy due to their careers, for example solicitors or accountants. For this group of people, an IVA allows them to continue their career as normal.

Satisfaction – There is not the same stigma surrounding IVA’s as there is with bankruptcy.

1.  Don’t use credit card for ordinary purchases.   Things like groceries, gasoline, clothes, and entertainment should not be acquired by using a credit card. Treating your credit card as a cash alternative or substitute can instantly leave you with a heavy debt.  For everyday purchases, consider using cash or your debit card instead.

2.  Don’t just settle the minimum payment each month. It only lengthens the period it will take you to settle your debt entirely. Further, the amount of interest that you have to pay also increases.  You should try to pay as much of your credit card bill as you can in order for you to settle your debts quicker and less costly.

3.  Don’t buy things you don’t have the money for by relying on your credit card. That is the easiest way to live in debt. The odds are, if you don’t have the money for your purchase today, you still won’t have the money tomorrow, or probably even next month.

4. Do identify your needs as opposed to just your wants whenever you are about to make a purchase.  Impulse buying on credit never amounts to a good thing.

5.  Do familiarize yourself with your credit limit and try to stay within 30% of it.  Credit scores consider the amount of debt you have.  Balances that are kept low help in garnering a good credit score.  Additionally, it is easier to manage lower balances.

It pays to be responsible with your spending, Bankruptcies and IVA’s are on the increase and finding yourself in a large amount of debt may also put you in this position.

More IVA Help and Advice -

BBC.co.uk

IVAAdvisoryCentre.co.uk

If both you and your spouse work, you’ll need to combine the two incomes for the basis of the budget. The first expenditures that you’ll want to include are the unavoidable ones. This category will include payments such as rent or mortgage, car payments, auto and medical insurance payments and your monthly utility payments.

While there are other unavoidable expenses such as food and personal items like soaps and shampoos, the amount for these items isn’t a set price. If you really want to make your money stretch, you can learn to shop for sales and even use coupons.

Once you’ve made all your calculations and set a certain amount aside for food and personal items, you need to decide what to do with what’s left. Depending on how much is left, you might want to deposit a set percentage into a savings account, set a certain amount aside for entertainment, or start making plans for a home improvement project.