This plan for an easier to obtain IVA should be in effect within the year according to the latest reports.

The changes hope to make a law that requires only 51% of the lenders who are owed debt to give approval for an IVA. Currently, 75% of the lenders for one's debts must approve for an IVA. This 51% rate would only apply on debts below 75,000. This new plan would also make it quicker to file an application for an IVA and involve less paperwork.

In an IVA, the lenders erase part of the money owed and the creditors must make a fixed agreeable monthly payment every month for a given time.

Charles Howson, chief executive of Accuma, a personal insolvency specialist, said: 'The existing laws are outdated and don't apply to the vast majority of people applying for an IVA today. These rule changes would simplify the process and make taking out an IVA more viable for people in debt.'

There were over 47,000 bankruptcies this year and the easier process for filing an IVA is an attempt to help reduce this number.

Around 20,000 people filed for IVAs this year and it is expected that a total of 30,000 will file for an IVA this year.

One of the main benefits is that creditors cannot get your home while you are on an IVA.

Trapped.co.uk has a range of debt management solutions, including Individual Voluntary Arrangements .