Thursday 7th of January 2010
Britons facing substantial interest payments on their debts could find that an individual voluntary arrangement (IVA) answers some of their financial problems.
Figures from Credit Action show that the average UK resident now pays £2,621 each year purely to meet the interest charged on their debts.
This amounted to a total of £66.1 billion for the country as a whole in the past 12 months - a figure that could be reduced if more families were to use IVAs to freeze their debts.
Credit Action cites PricewaterhouseCoopers research which suggests that, of the average household’s net income, 15 per cent is now put towards interest repayments.
However, many people could find that an IVA answers this problem by freezing the interest on their outstanding debts owed to a number of different lenders.
As well as merging all of the amounts owed into a single monthly payment - which may be easier to track for budgeting households - an IVA can prevent further interest from being accumulated while the debts are being paid off.
By Hayley Jones
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