IVA  Individual Voluntary Arrangement is an alternative to bankruptcy. A contract between debtor and creditors. Creditors would reasonably expect the prospects of recovering their money to be at least as good as in a bankruptcy. Your insolvency practitioner (known as your nominee) liaises between the debtor and the creditor on repayment proposals. The creditors must vote on the proposal. Generally, if over 75% vote in favour of the proposal, the IVA will be implemented. Creditors may put forward changes to the proposal, but the debtor can decide whether or not to accept them. If an IVA is not approved, a creditor could bankrupt the debtor.


Trust Deed (Scotland only)  akin to an IVA, a legally binding agreement, which allows debtors an alternative to bankruptcy. A trustee is appointed who supervises the arrangement and liaises with creditors.


Bankruptcy  a debtor who, upon voluntary petition or one invoked by the debtor's creditors, is adjudged to be legally insolvent. The debtor's assets are then, through administration, distributed to the debtor's creditors.


Debt consolidation  rolling up all or part of your unsecured or secured credit into one loan, which is done to lower monthly payments, but could result in paying more interest in the long run


Repossession  to reclaim possession of for failure to pay instalments due, e.g. a mortgage lender taking possession of a property for non-payment of mortgage payments


Administration order  a court order in respect of your current debts. The court collects payments and distributes to creditors. A charge is made by the court to cover costs.

Debt management  a debt manager will liaise with creditors an affordable monthly payment after having consulted the debtor and scrutinised their finances. An affordable payment plan is agreed and put to the creditors. The debt management company will then distribute funds to the creditors.

Copyright Brian Abbott