Economic danger warning may leave Britons needing IVA help

Many Britons may be considering individual voluntary arrangements (IVAS) if a warning from prime minister David Cameron turns out to be fulfilled.

Speaking to the BBC during the Conservative Party conference Manchester, Mr Cameron warned that there could be severe consequences for the UK if the eurozone countries do not solve their problems quickly.

He said: "I think there are some very serious clouds on the horizon, chief amongst them is the problems in the eurozone where the French economy, the German economy have both stalled and that is a real problem for the British economy."

The comments come as European finance ministers are meeting in Luxembourg in a bid to tackle the crisis in the single currency, with Greece admitting it has not managed to reduce its debts as targeted.

Should the fears of Mr Cameron be fulfilled, the consequences could be damaging for the UK because of its trade links with the eurozone, leading to the loss of British jobs and therefore more people being unable to meet their debts.

People who owe £15,000 or more and are unable to pay off what they owe can apply for an IVA, which will reduce monthly payments and freeze interest on existing debt.

However, it will require the consent of at least 75 per cent of creditors for the deal to be implemented.

Mr Cameron added that the government will also be making more domestic efforts to boost growth.

One move announced this week at the conference by chancellor George Osborne is that of credit easing, where funds from the Treasury will be used to boost small businesses who cannot get enough bank lending.

The chancellor described this action as "monetary activism" and something that could prevent a second credit crunch.

By Joe White