Wednesday 16th of September 2009
Individual voluntary arrangements (IVAs) can help people who are in debt, however, one newspaper says those struggling with financial commitments should speak to their creditors as soon as possible.
The Mirror says that between April and June this year, 30,000 Britons went bankrupt. While the publication notes that IVAs are one solution for people in serious debt, it suggests that borrowers should consider asking their lenders to negotiate their repayments.
If an agreement cannot be met, then households could then ask for IVA help, where a financial expert will talk to creditors, who will not be able to take further action if borrowers stick to the IVA conditions.
James Jones, from credit report agency Experian, tells the Mirror that if Britons who ask for help from their lender offer "to pay a decent amount, they may be able to come to an agreement that means there’ll be no arrears, so it won’t have any effect on their credit rating".
However, when debts have already piled up to serious levels, an IVA could be one way creditors can be appeased that the money they owe will be repaid, rather than written off like going bankrupt would do.
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
- Mortgages over 100% 'should be banned'
