Tuesday 23rd of February 2010
Asking questions on individual voluntary arrangements (IVAs) could show lenders that you are willing to take steps to repay what you owe.
Chris Tapp, director of Credit Action, says while there have been calls for a regulator to clamp down on high credit card rates, it is up to people to make sure they do not fall seriously into the red.
He says that nobody forces you to take out plastic with sky-high rates attached and, as such, the first step should be taking responsibility for your own financial situation.
You may agree that you have got yourself into this situation and so you will now get yourself out of it and one way this may be done is through an IVA.
Lenders could be more favourable to you if you pick an IVA - rather than bankruptcy - as more of your debt will be paid back to them.
The frozen interest rate and reduced monthly repayment may mean you are better able to meet your debt commitments, something creditors could look favourably on.
Mr Tapp’s comments came after former government advisor Ros Altmann told the BBC that "excessive" credit card rates of 18 per cent need to be reined in by a regulator.
"If the rates on credit cards are too much and it might be too expensive for them to pay back – then they don’t have to use the products. Nobody is forcing consumers to pay more than they must," he says.
He adds: "The companies should be able to charge whatever they like. If credit cards are not competitive, then people should refuse to use the product."
If you agree that getting out of debt is no-one’s responsibility but your own then you may decide to start getting some answers on IVAs to discover if this type of repayment plan is indeed suitable for your situation.
By Chris King
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- 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
- IVA FAQ: Can it prevent me from becoming bankrupt?
