How to fix: VSS snapshot creation failed with result: 80070002 on TrueCrypt Volumes

When backing up files using a backup solution you may get this error:

 VSS snapshot creation failed with result: 80070002

If the files you’re backing up are located on a TrueCrypt volume you may be using a version of TrueCrypt which isn’t compatible with VSS (Volume Shadow Copy Service).

You may need to turn off locked file handling in order to take backups on  a TrueCrypt drive instead