Wednesday 8th of September 2010
Seeking individual voluntary arrangement (IVA) answers may be a wise option for those of you who have miscalculated the cost of purchasing a house and have ended up with dangerous levels of debt.
According to new figures from money.co.uk, one-fifth of homebuyers find themselves lumbered with financial problems as a result of unrealistic budgets that don't take into account various unforeseen costs.
Some 21 per cent of respondents to a survey by the company paid more for their property than they expected - averaging at £23,000.
In addition, the data shows a large number of people in this predicament covered their costs by taking out credit, with 15 per cent opting for personal loans and 27 per cent using credit cards.
Answers on IVAs could, however, be beneficial for those of you who have racked up unsecured debts after the property-buying process and don't know how you'll get out of the red.
The method of insolvency offers the chance to cut the money you owe over a prolonged period of time - as long as you're able to meet the reduced-rate monthly repayments and demonstrate sufficient discipline to see it through.
And although the measure doesn't help with secured debt like mortgages, it could give you some much-needed breathing space by eliminating escalating personal loan or credit card balances.
Commenting on the numbers, managing director of money.co.uk Chris Morling says: "These findings demonstrate why methodical planning and budgeting are such important first steps to buying a property."
He adds: "It is all too easy to overlook expenses and end up in a precarious financial position. Households with debt piled upon debt are most likely to be at risk during tough economic times."
And it could be an IVA offers support to those of you desperately trying to stop your money troubles spiralling out of control.
By Ashley Littley
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- Government announces 'breathing space' for those needing IVA help
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- Holidaymakers could pay off summer debts with an IVA
