Personal bankruptcy has soared by 12 per cent in the past three months as the credit crunch hits, according to the Insolvency Service. More than 17,000 people were declared bankrupt in the third quarter of the year – around 175 people a day.

If things really are tough, it could be worth considering an Individual Voluntary Arrangement (IVA), rather than accepting bankruptcy.

An IVA is a deal between you and your creditors, normally arranged by an insolvency practitioner. The creditors are offered a proportion of the money owed, which they may accept rather than face getting nothing if you go bankrupt.

The IVA Insolvency Helpline UK offers a full Creditor Service to companies and individuals with the opportunity of representation at meetings of creditors anywhere in the United Kingdom.

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Big Earners: In times of economic strife, high income earners are a favourite government target. True to form the chancellor announced income tax would increase to 50% for anyone earning more than £150,000 a year, effective from April 2010, a year sooner than expected.

Homeowners: With house prices falling and banks getting tough on borrowers almost a million people are now in negative equity. This aimed specifcally at reducing the level of recorded IVA applications

To help, the chancellor said the mortgage interest schemes designed to stop people losing their homes in the event of job loss would be maintained at a higher level for another six months as long as homeowners are looking for work.

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Personal bankruptcy has soared by 12 per cent in the past three months as the credit crunch hits, according to the Insolvency Service. More than 17,000 people were declared bankrupt in the third quarter of the year – around 175 people a day.

If things really are tough, it could be worth considering an Individual Voluntary Arrangement (IVA), rather than accepting bankruptcy.

An IVA is a deal between you and your creditors, normally arranged by an insolvency practitioner. The creditors are offered a proportion of the money owed, which they may accept rather than face getting nothing if you go bankrupt.

The IVA Insolvency Helpline UK offers a full Creditor Service to companies and individuals with the opportunity of representation at meetings of creditors anywhere in the United Kingdom.

Chancellor Alastair Darling has announced a daring 2009 budget, worth an estimated £1.2 aimed at reducing the growing number of applications for IVA

“To preserve [the people's] independence, we must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty, or profusion and servitude.”
Thomas Jefferson, President of the United States of America,1801-1809.

Mr Darling told the Commons: “Following the meeting of the G20 countries in April, this year’s Budget statement will be on April 22, that is when the House returns after its Easter recess.”

Gordon Brown, the Prime Minister, told MPs that the Group of 20 summit is vital to any economic decisions the Government will make in the Budget.

“I think the context for any financial decision that would be made by most countries is going to be on what internationally we can achieve,” he said.

Of the personal insolvencies in England and Wales, around two-thirds were accounted for by full bankruptcy declarations, while the remainder were Individual Voluntary Arrangements (IVAs) – agreements which allow consumers to write down a proportion of their debts without having to suffer the full consequences of bankruptcy.

An honest declaration of your assets and/or anticipated future earnings should be made. Material or false declarations are likely to result in the subsequent failure of the IVA.

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Debt management agencies expressed concern about the faster growth in bankruptcies, claiming that too many people considered them “a quick fix”. Bev Budsworth, an insolvency practitioner for the Debt Advisor, said the profile of those claiming for bankruptcy was also changing.

If you wish to discuss the pros and cons of an IVA procedure and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.

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