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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

IVAs are `helpful but should not be taken lightly`

01/05/2008

Individual Voluntary Arrangements (IVAs) offer a way out of severe debt problems but should not be entered into without much thought beforehand, according to a report.

Writing in the Independent, expert Julian Knight said both IVAs and payment protection insurance - which have both had their critics - can help people out with major financial situations.

However, he noted that professional debt advice should always be sought before signing up to an IVA and such a method of sorting out debts is "risky".

John Tegg, managing director at insurance firm DMS, told the newspaper: "IVAs last up to five years and are a major lifestyle commitment.

"Can you imagine if you made all your IVA payments for four years and then got ill or were made redundant and the IVA failed as a result?"

An IVA is an agreement between the debtor and their creditors, in which a portion of the debt is agreed to be paid over a five-year period. After that period has elapsed, the debt is written off.

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