Thursday 23rd of December 2010
A rise in interest rates could cause those already deep in the red to seek individual voluntary arrangement (IVA) answers as an expert has claimed the effects of such action would have deep consequences.
Paul Holmes, chief executive officer of Firstrung, said it is unlikely interest rates will increase, but warned if they were to escalate by two per cent and lenders passed on that two per cent to borrowers, the effect would be "quite catastrophic".
The specialist said it could be enough to push people "over the edge" - which could include those in financial turmoil who need to ask IVA questions to help them survive financially.
He noted: "It would be an awful lot for people to cope with, particularly in terms of unemployment, less working hours, et cetera."
His comments come after the Confederation of British Industry predicted inflation across 2011 is likely to be higher than many analysts have previously predicted.
Posted by Ashley Littley
- Debt consolidation loans falling, figures show
- Britons 'changing attitudes' towards debt management
- Homeowners 'more concerned with debt management'
- Low interest rate 'contributing to debt management efforts'
- Debt management growing in importance, survey finds
- More people 'struggling to meet mortgage repayments'
