Individual Voluntary Arrangements (IVAs) could prove to be the answer to debt management problems providing the circumstances are right, it has been advised.

Peter Sargent, president of R3, said they are a means of avoiding bankruptcy, which often has a stigma attached to it.

He continued: "Most individuals we deal with are decent, honest, respectable folk, and they don’t want to not pay their creditors. They want to make a payment as best as they can offer."

The typical IVA lasts between three and five years, Mr Sargent revealed, which revolves around paying creditors with regular contributions from their income and releasing equity from their home.

People are able to stay in their homes through an IVA, which enables them to realise any equity it may hold later on.

The Council of Mortgage Lenders reported on June 22nd that it had decided to revise its prediction for the number of repossessions in 2009 from 75,000 to 65,000.

It is expected that around 360,000 mortgages will be in arrears by the end of the year – equivalent to around 2.5 per cent of total mortgages.