Saturday 6th of February 2010
A new study has split Britons in debt into four categories, some of which may require the help of an individual voluntary arrangement (IVA).
The National Audit Office (NAO) survey reveals that just under half of consumers are not currently falling behind with repayments but every now and again struggle to keep up.
Britons in the second group (14 per cent) always struggle to meet their repayments but are currently keeping up.
However, should an unexpected event occur which pushes household coffers into the red, then people in this group may find an IVA answers their situation.
IVAs can freeze the interest rates on unsecured debt, which could help those facing difficult periods to be able to keep up with repayments without being worried about falling uncontrollably behind.
While the third group (22 per cent) identified by the NAO are falling behind with a small number of bills, the fourth group (15 per cent) are the worst hit and cannot meet the majority of their financial responsibilities.
Many in this group may think bankruptcy is the only way out. But an IVA may be suitable for those with debts of more than £15,000 which are owed to a number of different creditors.
By Ashley King
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