Thursday 24th of December 2009
If you have found yourself splashing the cash a bit too much at the end of this year then you could find yourself threatened with repossession in the new year as the repayments catch up with you, one financial expert warns.
Chris Jenkins, co-owner of the Homeowners Advice Centre, says January and February could be the months of realisation by some of you that your debt is slowly becoming increasingly uncontrollable, although an individual voluntary arrangement (IVA) can prove to be a solution for many.
If you have a number of different debts that add up to more than £15,000 then you may find an IVA answers your money concerns.
Not only can an IVA freeze the interest on your various repayments, but it merges them together at a lower amount so you have more of a chance of meeting them.
Mr Jenkins says that one result of overspending in 2009 could be that people are left without a home in 2010.
He states: "If there are other variable problems like we have at the moment, such as unemployment and job uncertainty, then there might well be more enquiries in the new year with councils, which may push them further."
Recent figures from the Financial Services Authority showed that the number of repossessions in the third quarter of this year reached 14,000 - a 2.8 per cent increase on the previous quarter.
An IVA could help you avoid becoming bankrupt so long as you keep up with your monthly repayments.
Unlike bankruptcy, your job should not be affected and you may still have access to basic banking facilities.
Repaying debt through an IVA also remains a private matter, while bankruptcies can be announced in the local newspaper.
You may decide, after having your IVA questions answered, that this type of repayment plan is more suited to your needs, especially if you have a family whose home you want to protect.
By Rachel Powell
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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 help may support credit card borrowers
