The annual January struggle has hit borrowers particularly hard this year, with inquiries to insolvency practitioners up by two thirds so far this month from the same period last year. Individual Voluntary Arrangements (IVAs) are a popular method of repaying debts for those struggling to avoid bankruptcy, allowing debts to propose a plan to their credits of how to restructure debt repayments over a five year period, after which the debt is classified as settled.
The sub-prime crisis and ensuing credit crisis is likely to see more borrowers hit hard times in 2008. During 2007, there were a total of 110,000 insolvencies, whilst £1.3 billion was written off in bad debts . However, debtors are being warned against immediately opting for IVAs by the Citizens Advice Bureaux, who reportedly claim IVAs aren’t the right solution for most debt problems . IVAs are a fairly extreme way of restructuring debts, with the average IVA debtor owing in excess of £50,000 in 2007.
Insolvency Inquiries on the Rise as Borrowers Struggle with Loans
Thu, 17 Jan 2008
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