IVAs suitable for less than 5% of debt-laden Brits

Posted 2007-10-20

In many cases, debt consolidation loans are looked at more favourably by banks than individual voluntary arrangements (IVAs).

And many Britons seeking to manage their debts are unaware that more often than not, better alternatives to IVAs are available to them.

The Consumer Credit Counselling Service (CCCS) has noted that popular advertising campaigns have made IVAs more successful, but not necessarily to the greatest benefit of the individual seeking debt consolidation.

A spokesperson for CCCS stated, “People who go to an IVA company … very often don’t know that there are alternative options to them and alternative services.” He added that banks are becoming less agreeable to IVAs due to the potentially high costs imposed by the IVA company, which arranges the service.

The spokesperson also asserted that IVAs are suitable in less than 5% of cases, with bankruptcy the best option for about 15% of the hardest hit indebted Britons.

For the remaining four out of five individuals, the spokesperson asserted, “We suggest that people might be better off with other options.”

In many cases, debt consolidation loans could be the best choice; reducing the number and amount of monthly payments, and creating a fixed repayment schedule in which to financially recover.

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