Everyday the number of debt laden people declaring themselves bankrupt rises significantly and with the ongoing global 'credit crunch' exacerbated by the sub-prime crisis in the US, the situation is only going to get worse.

Already the number of people legally bankrupt is already at record levels and there may be a way you can avoid becoming part of that statistic. Debt management is available from a number of sources, all of which offering varying degrees of debt advice ranging from very good to very bad.

If you are heavily in debt there are a number of options available to you depending on the actual amount of debt you are in. A good debt management company will advise you on your best route out of debt and advice on how you can handle your creditors.

So what are your options?

IVA

An IVA (Individual Voluntary Arrangements) is a legal document signed by yourself, a Licensed Insolvency Practitioner and your creditors. It has the potential to write off as much as 90% of your debt.

Once an IVA is set up your creditors are legally obliged not to pursue you for payments outside of the IVA.

As part of the IVA you agree on a single, reduced, affordable monthly payment, usually for a period of between 3 and 5 years. At the end of this, as part of the agreement, the remainder of the debt is written off. During the repayment period all interest charges, and demands for money, are frozen.

This may sound too good to be true but it is a legal agreement and can be favoured by creditors. This is because an IVA (Individual Voluntary Arrangement) can save them money in debt collection whilst still allowing them to recover some of the debt.

To be eligible for an IVA, your debt must exceed £15,000, you must be an individual (not a company) based in England, Wales or Northern Ireland and you must have a regular income. It does not matter if you own your home or if you are a tenant.

Help with an IVA may still be available if you do not meet these requirements.

Debt Management

Debt management involves allowing us to manage your debts on your behalf. We negotiate, on your behalf, affordable monthly repayments with your creditors. This is based on what you have told us you can afford.

If you have relatively low debts but are unable to meet your repayments, debt management may an appropriate solution for you.

Debt Consolidation

Debt consolidation involves combining your debts into a single secured or unsecured loan. This would reduce your overall monthly repayment amount

Loans

Loans are becoming a popular choice for people in financial difficulties. These can often be arranged regardless of a good or bad credit record. You will be advised at to whether a loan is appropriate to pay off your debts according to your particular circumstances.

Remortgage

If you are a home owner the equity you have tied up in your property can be released to help resolve your financial problems. It is worth shopping around in order to get the best offer. Some companies charge substantial arrangement fees so be careful who you choose

Bankruptcy (a last resort?)

If none of the options above are suitable for you, as a last resort, bankruptcy may be an option for you. This is an option that needs very careful consideration and expert advice and again should only be a last resort.

The consequences of bankruptcy are far reaching and will probably stay with you for the rest of your life. Professionally you cannot be a director of a company and will find it difficult to start or run your own company. Personally there may be a certain amount of stigma attached to bankruptcy. In both circumstances you will find it practically impossible to acquire any kind of financial service, including credit cards, loans, mortgages and insurance.

The need for expert advice really cannot be underestimated. The right debt advice can help you avoid bankruptcy with an IVA or debt management. If bankruptcy is decided to be your best option, an ethical debt management company will support you through the bankruptcy process to limit its impact.

Worrying about your debts is not enough, take the first step today, get some debt advice and get your debts cleared.