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An IVA is fast becoming the number one debt solution in the UK. Thousands of people annually, are requesting the chance to be offered an agreement of an IVA by their creditors. IVA help and advice is once thing, yet I am more concerned with the fact that money is still being somewhat irrationally and occasionally immorally lent to people who know that they cannot repay such borrowings.

I say immorally because in a recent study of people who took out IVAs, 43% of them were people who had large depressing debts (over £15k), and not for things they needed (like household bills or other debt repayments) but for things they wanted. Shockingly Sainsburys published a report in 2007 into their personal loans and the spending habits of their debtors, stating that £5 million they had leant out had been spent on plastic surgery. Now I'm not one for telling anyone how to live their life but getting IVA advice and help for the sake of a nose job seems ludicrous.

With over 15,000 people declared bankrupt in the first quarter of this year alone, it doesn't bode well when you and I well know that banks are not going to just let this amount of money disappear. They will simply reclaim it else where by increasing interest rates, lowing saving rates and other joyful things banks do!

The ease of acquiring a loan these days is scary, there is no sense in the fact that a person can acquire a loan with out the means to pay it back. What is worse is that the banks and lenders allow you quite willingly to do so. This is a negative situation that no amount of IVA help or advice can reverse.

What I am trying to say is, people be aware!

A friend of mine recently fell on hard times. Many personal issues built up and sadly he accumulated over £17000 of debt. He came to me and in a bit of a panic and started asking about his options. He was adamant that he would have to settle for bankruptcy. He saw no other way out of his personal financial hell and thought no other debt solutions (such as an IVA) would be available to him.

Bankruptcy, I explained to him, is the last port of call for people with very little options left. I explained to him the consequences of such final action. For example it may clear his debts, but he would be left with seriously a bad credit rating. It would be very unlikely that he would be able to keep his house, car, any valuable furniture, any unapproved pension schemes, his life insurance may be at risk and worst of all he may loose his job depending on how his employer viewed his position. He would effectively be financially black listed for a minimum of 12 months to a possible maximum of 15 years.

He told me that this wasn't an option, and I told him that it was O.K as there were other options available to him. I discussed debt solutions with him, including simply saving and managing your own debts. Again this wasn't an option for him as he told me the creditors were one step away from banging on his door. He needed professional help and fast.