Tuesday 14th of December 2010
People seeking guidance on the amount they are in the red by may start asking individuals voluntary arrangement (IVA) questions if they find they can no longer cope with the financial strain they are under.
According to a report entitled Demand, Capacity and Need For Debt Advice in the UK, 1.4 million Brits have sought advice from charities that counsel individuals about their monetary problems.
Commissioned by the Money Advice Trust, the study found that 2009 saw a year-on-year rise of 350,000 individuals asking for free help from organisations such as Citizens Advice.
One option that may be considered by those who find themselves buried in the red is an IVA, which consolidates all existing debts into one manageable monthly payment following an agreement with creditors.
"The last few years have required debt advice charities … to bring about a step change in our capacity, not just to help people out of their immediate debt problems, but also to help them back into financial health with longer term planning," said Joanna Elson, chief executive of the Money Advice Trust.
She noted there may be a surge in demand for financial advice if interest rate rises and unemployment forces more Brits into a time of monetary problems.
Expert on credit, debt and borrowing in the Centre for Policy Evaluation in the School of Economics Dr John Gatherood observed that less help is being sought than is currently needed by UK households.
Dr Gatherood - who was behind the production of the report - stated the majority of people with outstanding repayments that are a problem are not doing anything to resolve the situation.
This latest document comes after an investigation carried out by NMG Consulting that was commissioned by the Bank of England discovered 51 per cent of the UK population are finding it difficult to pay back money they have borrowed.
By Mark Waterman
