Sunday 10th of January 2010
An individual voluntary arrangement (IVA) could be ideal for people with credit card debts of more than £15,000, particularly if a number of different plastic has been used, resulting in climbing interest repayments.
Someone who is concerned about their credit card debt is Celebrity Big Brother contestant Nicola Tappenden, who has revealed she has entered the reality TV show in order to clear her £35,000 credit card debts.
Britons who have similar levels of plastic debt could find an IVA answers their financial concerns. An IVA can merge all credit card balances and allow one, monthly repayment to be made at a reduced rate.
"I’m almost skint. I’ve just been treating my cards like they were cash, but not realising I am not earning what I once did," she explains.
People who rely on their credit cards the same way could find their repayments are now uncontrollable, but an IVA freezes interest rates on such unsecured debt, making repayments more manageable.
Fellow Big Brother housemate actor Steve Baldwin filed for bankruptcy last year. An IVA, for some people, can prove to be an alternative to being declared bankrupt, although it will leave a mark on credit files for around five years.
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
- IVAs 'should be promoted as more ideal than bankruptcy'
