Wednesday 27th of October 2010
Reining in your spending is often a good idea if you find yourself with serious money troubles. But what can you do when your debts have started to spiral out of control?
Researching information on individual voluntary arrangements (IVAs) could be a sensible move in this situation, giving you a chance to whittle away the cash you owe over an extended period of time.
According to the October Markit Household Finance Index, the announcement of the government's austerity measures in the form of the Comprehensive Spending Review has left many households across the UK feeling anxious about their finances.
The study shows there was a "sharp deterioration" in family finances this month, with lower incomes and higher levels of debt causing the majority of the worry,
In addition, October has seen growing numbers of people become concerned about their job security, with both public and private sector jobs threatened by the coalition's plans.
Commenting on the state of the public's finances at the moment, John Miles from Gocompare.com says "belt tightening is still the order of the day".
He adds: "The publicity following the spending review has kept everyone focused on cutbacks. Many people are still cutting back on what could be seen as more unnecessary spend, such as takeaways, nights out [and] clothing."
However, if reining in your expenditure has not been enough to cure your financial woes and you still find yourself deep in the red, seeking IVA information could be a wise choice.
That's because the measure offers you the chance to erase your unsecured debts that are worth more than £15,000 if you owe the money to three or more different creditors.
Furthermore, it doesn't require details of your cash troubles to be published in the local newspaper, which is the case with bankruptcy.
Mr Miles goes on to state those already struggling to keep their head above water or who have experienced a significant drop in their salary will be the ones most affected by further government spending cuts.
People in this bracket will "seriously need to reduce their outgoings", he continues.
By Hayley Jones
- 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
- Do you prefer undertaking an IVA, rather than a second job?
