Tuesday 16th of March 2010
Individual voluntary arrangement (IVA) questions may still need to be asked by an increasing number of people, despite new government guidelines to make lending more responsible.
Commenting on the proposals laid out by prime minister Gordon Brown, Chris Tapp, director of Credit Action - which releases its UK debt report at the start of every month - said more steps need to be taken.
While he welcomed the new rules, which may help many of those who have asked questions on IVAs and other repayment plans, he said the chance of a complete overhaul of the system had been missed.
However, he did note that "changing the order of payments so that the most expensive debt on credit cards is going to be paid off first is a really positive step and that is an area where the government should be commended".
IVAs can overcome the problem of the smallest balance being paid off first by merging all unsecured debts like credit cards into one, monthly repayment.
Furthermore, the interest rates on credit cards are frozen, meaning people only have to fork out for one, controllable repayment every month, rather than falling behind with a number of different ones.
By Ashley Littley
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