Tuesday 26th of January 2010
A "double-dip recession" could be on the cards for the UK, a claim suggests, which could highlight to consumers the importance of repaying debt now, potentially through an individual voluntary arrangement (IVA).
Mark Bolsom, head of the UK trading desk at Travelex, says the UK’s economy is expected to have left the recession in the final quarter of 2009.
But the aftermath for businesses may mean more job cuts and closures have to be made - and this could create a second wave of people who require financial assistance, although they may find an IVA answers their debt dilemmas.
If one half of a couple finds themselves out of work, then this could impact on the ability for a household to repay their unsecured debt. An IVA can, however, freeze the interest on such borrowings over £15,000, which could take some of the pressure off households during periods where a member if unemployed.
"We think that the chances of a double dip recession cannot be ruled out. Unfortunately, we forecast a bumpy couple of years for UK consumers and businesses," Mr Bolsom states.
By starting to participate in an IVA as soon as possible, Britons could find their household coffers are protected from a second recessionary dip as they will have an agreement in place with lenders to make debt more manageable.
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
- Could an IVA help you spend more time with your family?
