How to clear bad debt?

Bad debt charges rose from £22.5 million to £44.5 million, but the company was still able to increase its profit growth target by five per cent.

Its chief executive, Adam Applegarth, pointed the finger at the change in UK bankruptcy laws, which he believed had been badly implemented by the government.

Speaking to the Times, Mr Applegarth added that this had resulted in many more people turning to Individual Voluntary Arrangement (IVAs).

“We have seen a number of ambulance-chasers springing up and chasing business for IVAs by advertising on television,” he said.

But ClearDebt marketing director, Andrew Smith, stated that IVAs were “here to stay” and that they were in the best interests of creditors as they would get more money back.

He said: “IVAs will only be advised if it is the best option for the client, and that almost always means it’s the best option for creditors too – and it’s the creditors that pay the IVA fees, not the client.

“Creditors ought to start taking more of an interest in the fees charged by IVA providers as low fees, like ClearDebt’s, can make a big difference to the returns they get.”