Wednesday 22nd of September 2010
Individual voluntary arrangement (IVA) answers could be an invaluable source of information for people who want to finally get a grip on their finances and erase their mounting unsecured debts.
A new study by groupola.com finds that of the 78 per cent of Brits with an agreed overdraft, 18 per cent constantly live in the red.
What's more, 24 per cent state they couldn't live without their overdraft - more than the 21 per cent who claim they only delve into it for emergencies.
Commenting on the data, founder of moneymagpie.com Jasmine Birtles says too many people appear to be living off what they believe to be free money, especially as many overdrafts come with charges.
She notes: "If you're at that stage and you suddenly lose your job then you're in a worse state than people who are just about in the black."
Answers on IVAs may, however, be beneficial for those of you who want to start getting out of your overdraft but find it difficult due to debt repayments elsewhere.
Having to meet hefty credit card and personal loan bills every month can mean much of your income is used up before you get the chance to draw on it for other things.
An IVA, though, could free up more of your salary by helping you wipe out all of your unsecured debts with around 60 reduced-rate monthly repayments.
The measure can't assist directly with your overdraft, but you may find it means the money usually put towards settling your credit balance can go into your bank account.
Ms Birtles adds not enough people even check their bank statements and, as a result, are being charged for things of which they're completely unaware.
If you want to take control of your finances, though, an IVA could be a wise option.
By Ashley Littley
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- IVAs may offer helping hand to those worried about tax rises
