Those in debt urged by bank to get advice

Steve Gracey, from Alliance & Leicester, said that many people are choosing an IVA as an alternative to bankruptcy, but he urges consumers to be “sensible” about this.

“Statistics show that more people are taking out IVAsand more people are going bankrupt. What people should remember is that it is okay to have manageable debt and people have got to be sensible about it,” he said.

“If they don’t borrow in a sensible way they could get into financial difficulty.”

Mr Gracey urged consumers to seek out quality debt advice.

“That is when people should look to get free advice on what their options are,” he added.

His comments come as a report indicates that many people used store cards to make their Christmas purchases. With interest rates as high as 23 per cent, this means that many people could start getting hit by large repayments in the new year.