Saturday 30th of October 2010
Seeking individual voluntary arrangement (IVA) answers might be one option facing new parents who have found themselves in debt as a result of taking out 'baby loans', following new figures from Sainsbury's Finance.
According to a study by the organisation, Britons have borrowed some £2.32 billion over the past five years to help fund the cost of new-born children.
The research showed 6.1 million people in the country have planned or are currently planning for a new addition to their family, with expectant parents making use of credit cards and personal loans to decorate the home, furnish the nursery, buy a pram and invest in baby clothes, among other essentials.
Answers on IVAs could, however, be useful for those who have amassed more than £15,000 worth of unsecured debts and want to get back into the black.
The method of insolvency whittles away the money you owe on plastic and personal loans to three or more creditors over a period of around five years.
However, it does require a lot of hard work and discipline to meet the series of reduced-rate monthly repayments.
Steven Baillie, head of loans at Sainsbury's Finance, said: "Preparing for a new arrival can be expensive when you take into consideration costs such as buying the necessary equipment, upgrading the family car or maybe even extending your property."
By Kimberley Parsons
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