Saturday 20th of March 2010
Individual voluntary arrangement (IVA) answers could be required by Britons who use credit to prop up their finances, despite already being massively in debt.
One way they may have done this is through credit card cheques. But one institution, MBNA, has said from March 31st it will no longer issue such credit to customers.
Welcoming the move, Andrew Hagger, of Moneynet.co.uk, says it should help individuals who rely on credit card cheques to "buy themselves some breathing space".
Credit card cheques can also be used to repay the minimum amount on other credit cards. But simply taking on more debt to cover other credit could leave people in a serious mess.
Rather, IVAs can merge different credit card balances into one, monthly, more affordable repayment, giving people breathing space in the knowledge they have not borrowed more to do so.
"For someone struggling with money it saved having to admit to their problems or speak to anyone about it and, because of that, people were prepared to put up with the high costs associated with this type of borrowing," he stated.
But rather than keeping quiet, people should not be ashamed of getting their questions on IVAs answered to improve their financial outlook.
By Neil Burton
- 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 advice may prevent money situation from worsening
