If you don't think you'll ever be able to clear your debts completely, you'll probably need to find a debt solution that can write off the debt you can't afford to repay.

One option may be an IVA (Individual Voluntary Arrangement) - a formal arrangement with your lenders in which you'll repay as much as you can for an agreed period (usually five years).

An IVA can write off the debt you can't afford to repay, but it won't do this straight away. You'll need to complete the IVA before your lenders write off the remaining debt. If your IVA fails, you'll still be responsible for clearing the rest of your debt.

How an IVA works, step by step

If you've discussed your options with an Insolvency Practitioner (IP) and they think an IVA is the right option for your circumstances, your IP will work with you to draw up an IVA proposal.

Your IVA proposal sets out the proposed terms of your IVA: how much you can afford to pay, how long the IVA will last, etc. It'll also contain details of your financial situation, to demonstrate to lenders why an IVA is the best way for you to repay a reasonable proportion of your debts.

This must be accepted by 75% of voting lenders (by debt value) for your IVA to go ahead.

If it does, you'll start making regular monthly payments to your IP, who will distribute the agreed amounts between your lenders.

On successful completion of the IVA, what's left of your debts will be written off and you'll be legally debt-free.

What other debt solutions can write off my debts?

There are a few debt solutions that can do this, but only if you can't afford to repay your debts in full. If you'll be able to clear your debts within a reasonable timeframe, you'll be expected to do so.

Bankruptcy

A legal process in which your debts will be written off by a County Court. This will be with immediate effect, but you won't be discharged from bankruptcy for at least a year, and you may be required to make monthly payments towards your debts for three years.

Debt Relief Order

Similar to bankruptcy, but only available to people with very little in terms of disposable income, debts and assets - so you won't be eligible if you own your home or a car that's worth over £1,000, for example.

Remember that all of these debt solutions will have a serious impact on your credit rating, and all are only available to people who really need it. You'll need to discuss your options with a debt adviser to decide which is right for you.