Wednesday 16th of June 2010
Individual voluntary arrangement (IVA) FAQs could offer useful information to those of you who have been relying on credit to help you afford the cost of living.
According to figures from uSwitch, eight per cent of Britons think they may end up defaulting on debt repayments over the next couple of months because of their financial instability.
And Ann Robinson, director of consumer policy at the firm, comments while it may seem convenient to take out a personal loan or other such unsecured product to help tide you over, doing so may actually cause serious problems.
Embarking on an IVA may, however, be a positive first step if you want to try and get rid of the money you owe and turn your back on credit once and for all.
It could whittle away your outstanding unsecured debts over a period of around five years, but it should be noted that the form of insolvency is only available for those who are employed and have the discipline to meet the reduced-rate monthly repayments.
"Short-term debt solutions may be an easy way to fund the cost of living, but they can lead to severe debt issues if not managed properly," Ms Robinson says.
By Mark Waterman
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