Wednesday 2nd of December 2009
Getting IVA help now could negate the need for Britons to lose their home in order to honour their financial commitments.
A new study shows that a fifth of people would sell their home if it meant they could clear their debt.
But with property values down and repossessions becoming increasingly common, relying on a home as an emergency source of funding could prove unwise, Bright Grey asserts.
Over a quarter of debtors say they would ask their creditors for help if they struggled to keep up with unsecured debt repayments. Indeed, lenders could agree to an IVA repayment plan, which would see more debt being repaid than the amount they would have received if they had pushed for their debtor to become bankrupt.
Using an IVA to repay their creditors may also be more favourable to Britons as this could mean they get to keep hold of their family home and avoid further legal action in court or newspaper announcements about their financial status.
The survey also reveals that 13 per cent of people would rely on credit and loans to help meet their monthly bills, a tactic which would push up interest repayments for cash-strapped consumers further.
By Chris King
- 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
- IVA support may stem the tide of bankruptcies
