In a discussion with one of the sponsors of PFStock, the topic of an Individual Voluntary Arrangement (IVA) was brought up. I was not familiar with IVAs, so I decided to do a little research into the topic. In the United Kingdom, when a person declares bankruptcy, the details of the bankruptcy are advertised in the local press.
Due to the Insolvency Act of 1986, individuals in the United Kingdom have an alternative if they wish to avoid bankruptcy. This option, called an Individual Voluntary Arrangement (IVA) , is an agreement between a debtor and creditors. The debtor agrees to pay a monthly sum, usually for 5 years, to their creditors through this arrangement. This sum is divided up between the creditors, who accept the sum in settlement of the amount owed.
The monthly payment is based on one's income and expenditure. In general, more than 75% (in value) of the creditors must agree in order for the IVA to be approved. A standing order authority (usually a company) will be set up to handle the payments.
An IVA might be suitable for people who cannot pay their debts. To read more about IVAs, I suggest the following website: Debt Advice Trust. The Debt Advice Trust is a not-for-profit charity in the UK with the aim of helping people get out of debt by giving free, impartial advice. The site has a forum and lots of in-depth FAQs on debt and staying debt-free.