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Consumers `struggling to cope with mounting debt` Bankruptcy increases by 7% `More Brits applying for personal loans` 70% of Brits `without unsecured loans` Pre-paid cards `more popular as debt rises` IVAs `a real alternative` to bankruptcy Brits `trying to escape credit crunch` by moving abroad West Sussex consumers suffering debt IVA agreements increase Industry body welcomes IVA mailing probe OFT to target bogus IVA companies IVAs can be "helpful" for large debts IVAs - consumers warned about bogus deals Insolvency rates rising IVAs can be "better option" than bankruptcy IVAs are `helpful but should not be taken lightly` IVAs `good to get out of tricky situations` People should "think very carefully" before entering an IVA IVA `saved businessman`s house` Govt unveils new IVA code

Banks` "unfair" decision threatens "fantastic" IVAs

22/11/2007

Individual Voluntary Agreements (IVAs) are a "fantastic" way for consumers to get out of debt but entering into such a scheme should not be a decision taken lightly, an industry expert has claimed.

The UK Insolvency Helpline has also slammed a decision by many leading banks to increase the proportion of debt needing to be paid off by consumers from 25 per cent to 40 per cent.

Such a move has been labelled as "unfair", as the IVA system has been a "success" since its introduction in 1986, Ian Richards said. He stated that a new method of IVA system may have to be introduced to make it "fairer" for both banks and consumers.

Mr Richards added: "I think what you will find is that the government will bring out a streamlined IVA, which will be a much more simple process. It will cut out a lot of the costs and it means IVAs will become popular again but it will mean that the IVA practitioners will earn less money."

Recent government statistics show that in the second quarter of 2007, there were 10,698 IVAs taken out, a decrease of 15.1 per cent on the previous quarter.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according