An independent voluntary arrangement (IVA) has been suggested as a good way for indebted people to strengthen their financial positions.
According to the Daily Mirror, 30,000 people began bankruptcy proceedings between April and June of this year, indicating that debt management plans are a necessity, with many borrowers entering into negotiations with their lenders with a view to reducing their monthly payments.
The publication observed that, for those owing over £15,000 to three or more creditors, an IVA could be a good route to choose as it enables debtors to pay off some of the amount outstanding while still being able to retain assets and bank accounts.
James Jones of Experian, a credit report agency, was quoted as saying that those who approach their lenders “as soon as their circumstances change” could come to an agreement to avoid black marks on their credit ratings.
Earlier this week, Michael Coogan, director general of the Council of Mortgage Lenders, corroborated this view, stating that the majority of those who work together with their banks are successful in solving short-term payment issues.
By Sarah Adie