Monday 26th of October 2009
Individual voluntary arrangement (IVA) advice could be the answer for cash-strapped consumers with credit cards who, under new government guidelines, could be forced to double their repayments each month.
Consumer affairs minister Kevin Brennan is set to unveil a report into credit and store card spending - which will include a proposal to force credit companies to ask for twice as much cash back, reports the Observer.
The average required repayment has fallen from five per cent of total debt to around two to three per cent over recent years, meaning those who only pay back the minimum each month are seeing their debt rise significantly.
And the government is unhappy that credit card bosses appear to be doing little to control this.
Some people who have been pushed into debt because necessary repayments on credit card debts have reduced in size may want to consider an IVA.
IVAs tackle unsecured debts, such as those accumulated on credit cards, of up to £15,000 and can lessen the burden on debtors each month by putting in place a repayment structure based on what an individual can afford.
By Kimberley Parsons
- 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
- Personal insolvencies 'on the up'
