IVAs to help debt-saddled Brits?

More people may need debt consolidation methods such as individual voluntary arrangements (IVAs) as they continue to struggle with their repayments.

More people may need debt consolidation methods such as individual voluntary arrangements (IVAs) as they continue to struggle with their repayments.

According to statistics released by Credit Action, total UK personal debt at the end of July 2010 stood at £1,456 billion. This figure is extremely worrying for some because the figure is higher than the amount the country produces over a 12-month period. And the Office for Budget Responsibility does not think the situation is likely to improve over the coming years.

Predictions suggest by 2015 this figure will have risen to £1,823 billion, which equates to a growth of £159 million each day. If this does bear true it will mean average household debt will stand at £72,341. Total consumer credit lending to individuals at the end of July 2010 was £217 billion. The circumstances could also be compounded by the announcement there are 1,666 people being made redundant every day.

For those who can no longer manage their repayments and feel they need help an IVA could be the answer. The method will help those who are trying to become debt free by offering them the opportunity to merge unsecured loans into a reduced-rate monthly payment.

After five years, the debt is then typically seen as settled and people can then go on from there with a much healthier financial situation. With 1,000 people seeking some type of formal debt rescheduling every working day, it appears many have decided this type of option may be the best one for them.

It comes after Karen Barrett, chief executive of unbiased.co.uk, remarked many consumers in the UK are keen to pay back the money they owe. Research by her company has revealed people are using savings to try and reduce the amount they are in arrears, as they seek to make their finances more manageable.

Posted by Amy White

ADNFCR-622-ID-800048674-ADNFCR

Tell others:

shortlink