Though many people petition for bankruptcy to deal with their debts, just as many shy away from bankruptcy and consider other solutions to straightening out their debt problem. There are a number of different strategies for handling debt.

For starters, contact your creditor(s), ask for their cooperation, and try to work out different payment arrangements or options. For example, if you are snowed by credit card debt, get in touch with the company, explain the situation, and ask to temporarily reduce your minimum monthly payments, waive late charges, and extend the payment period - with smaller payments at "no" interest.

A second recommendation is to turn to the Citizens Advice Bureau, a nationwide non-profit organisation that will work with you and your creditors to devise a more manageable repayment plan suited to your finances. A third might be to sell any of your assets that have a resale value and apply the proceeds to your debt.

Any balance due can be negotiated with the creditor. Of course, the solution may be to enter into an Individual Voluntary Arrangement ("IVA"). This is a process very similar in terms to the CVA outlined above. This is a procedure sanctioned by the Courts whereby an IP is appointed to supervise an arrangement with your creditors. This arrangement could be one which could last for anything up to five years.

It may make provision such that only a percentage of the debt is eventually paid or that the debt is repaid albeit over a much longer period. The IVA procedure is discussed in more detail below. Finally, another solution is to consolidate all outstanding debts into a single loan (often through credit card balance transfers and home equity loans). This approach relieves you of being saddled with debt from multiple creditors, since you will be making payments only to one lender.