Friday 20th of August 2010
Consumers concerned about the high cost of credit in the current market may wish to seek answers on individual voluntary arrangements (IVAs).
This form of insolvency allows borrowers who owe more than £15,000 to repay their debts over a period of five years and start living within their means.
And with the Money Advice Trust noting the credit card interest rates in particular have remained high despite declines in the Bank of England's base rate, more Britons could be finding themselves in need of debt help.
Head of research and policy at the charity Louisa Parker suggested credit card companies have been making higher margins in the last couple of years, calling for lenders to consider the Bank rate when pricing products.
"Many consumers will have seen little or no benefit from the low base rate," she said.
While an IVA requires hard work and commitment, it can freeze the interest on unsecured debt and therefore allow the borrowing to be brought under control.
By Rachel Powell
- 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
- An IVA could end the inconvenience of climbing credit card debts
