Saturday 20th of February 2010
Today (Saturday February 20th) is Debt Freedom Day, a fact which could give people in serious debt the push they need to finally get their questions on individual voluntary arrangements (IVAs) answered.
According to Unbiased.co.uk, today marks the occasion because Britons will spend the first 50 days of 2010 earning enough money just to service the interest on their debts.
Interest rates on unsecured debts such as credit and store cards could be the biggest financial concern for households, with a large portion of income going on clearing interest before the actual debt itself is touched.
An IVA could help with this difficulty. IVAs freeze the interest rates on unsecured debt, which could give Britons the breathing space they need to get on track with repayments and make headway into clearing what they owe.
It could be particularly frustrating for individuals who have seen the official Bank of England base rate remain at 0.5 per cent despite the interest rates on credit and store cards continuing to climb.
Chief executive of Unbiased.co.uk Karen Barrett stated: "It may come as a shock that Debt Freedom Day actually only marks the day when we have paid of the interest on our debts, rather than the actual debt itself!"
By Rachel Powell
- 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
- Workers lose £650 per year from their pay packets
