If you’re smart about your finances and make calculated moves instead of taking leaps of faith, it’s very unlikely that you’ll ever be faced with a debt that you can’t pay back. However, let’s not forget that no one wants to be in that kind of a debt and if they ended up there, it was a mistake and now they need to get help.

The most obvious thing to do when you’re in this kind of a situation is to make an arrangement with your creditors so that you can pay back the money you owe in amounts that you can afford. This kind of an arrangement is called a DMP or Debt Management Plan and it works for a lot of people since there’s no eligibility criteria and it’s available to anyone in this kind of a situation.

However, being in a DMP arrangement with your creditors can sometimes mean that you’ll be paying them for years and years till you’re finally free of your debt. If you really want to get out of the depths of your debts, perhaps you should look into an Individual Voluntary Agreement instead. In this agreement, you have to make payments to your creditors within a certain agreed upon time frame; basically, you’re paying back what you can afford to pay till this time and once the time’s up, the rest of the debt is written off.

IVA makes it possible for people in really bad cases of debt to be debt free once again. The idea behind IVA is to facilitate the debtor so during the term, all of the interest is frozen so that the debt doesn’t increase anymore. However, you have to adhere to the IVA once you’re in it otherwise your creditors can force you to declare bankruptcy.