Bankruptcy isn't something that any of us like to consider, and when people start throwing in alternative options it can only make matters seem worse. But there are some things that it can really help to know about if you're looking down the barrel of severe of financial difficulties. IVAs are something that can get you back on track, and do so in a way that allows you to save what's important to you.

An Individual Voluntary Option used to be something that businesses took out when they wanted to protect assets or maintain business relationships. But with a lot of people facing consumer debt it makes sense that the option should be available for a wider range of issues. In this option, you don't hand over all of your assets to a Trusee who then sells whatever they like in order to get the money you owe to creditors. With an IVA you can liaise with a Supervisor to make sure that the stuff that really matters, like your prized car, or a family home, is not part of the deal.

Time is a big difference between bankruptcy and IVAs too. Bankruptcy is usually quite a short but severe process, taking place over a year or less. An IVA might be a process that takes five years, and usually means a larger proportion of money going to creditors in the end. This is the payoff for the extra protection you get on your business or possessions. However, IVAs allow you to keep trading without announcing your financial status too, so if you're self employed, this can be a real bonus.

Credit history is something that can make a big difference when it comes to getting loans or renting property when you're back on your feet again. An IVA can look better to credit assessors, as it proves your ability to make structured payments. Initially, IVAs require a 75% vote in favour from secured creditors, but after this, you have the guarantee that everyone will hold to the agreement provided you can keep to your side of the deal. This also means that you aren't hassled by separate creditors.

It might sound like two sides of the same coin, but depending on your circumstances it can really help to go for an IVA rather than bankruptcy. You'll be able to secure what's important to you during this stressful time, and feel more in control.

Do you still ask yourself What is an IVA? Find out more here.