Sunday 20th of December 2009
The first financial priority for a household should be to pay off their debts, a claim suggests, although an individual voluntary arrangement (IVA) could prove to be of assistance for those Britons who find the task of repayments almost impossible.
Credit card debt should be placed at the top of the unsecured debt list, according to Moneymagpie.com, but individuals with a number of different cards may not know where to start, especially if different interest rates are causing a monetary headache.
One of your first questions on IVAs could be how they help you to manage your interest repayments. IVAs freeze the interest on unsecured debt, meaning that they do not continue to rise out of your grasp, allowing you to make repayments.
Commenting on the danger of credit cards, Jasmine Birtles, founder of Moneymagpie.com, says: "All that money that [Britons] have to play with, I would say you can’t play with it; you have to pay off debts - that’s the way it has to be."
She adds that once unsecured debts have been cleared then people should set their sights on saving.
An IVA could make this a reality as once debts are cleared after about five years, a larger proportion of income could be put to one side for the future.
By Chris King
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Do you cover your living costs with store and credit cards?
