Tuesday 22nd of December 2009
Personal insolvencies hit record levels this year and there will be an increase in such figures in the new year as 2009 debt catches up with people, a claim suggests.
R3 president Peter Sargent says over six million Britons are worried they will have no cash to meet their financial commitments at the end of this month, although an individual voluntary arrangement (IVA) could prevent this problem becoming a recurring theme.
An IVA can merge unsecured debt such as credit and store cards into one more manageable, monthly repayment.
This could increase the likelihood of people being able to repay their debt, reducing the risk of a severe financial hangover in 2010.
"We’re urging people not to spend more than they’re earning and to seek professional advice as soon as possible if debts start mounting up," states Mr Sargent.
But if debt has already soared past the £15,000 mark, Britons could find an IVA answers their credit concerns by putting a plan in place to meet their repayments at a more affordable rate.
And an IVA could negate the need for lenders to get a borrower declared bankrupt as they are more likely to receive their money back through this type of repayment plan.
By Mark Waterman
- 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
- Got a mortgage to consider? Seeking IVA answers may help
