Record numbers taking out voluntary arrangements to cope with debts - MSE News

Former_MSE_Naomi

Record numbers of Individual Voluntary Arrangements were taken out last year by people struggling with debt, according to new Government figures...

Read the full story:
'Record numbers taking out voluntary arrangements to cope with debts'

Click reply below to discuss. If you haven’t already, join the forum to reply.

sourcrates

And a lot of these people should never have been granted an IVA in the first place, we get forum members on the IVA board asking for advice, as their IVA is becoming unafordable, when asked how much debt they have, we are getting figures of 5,6,9,10 thousand pounds, you should not be in a IVA with such small amounts of debt.

Individual voluntary arrangements were originally designed for homeowners who had massive debts but because they had an asset to protect, such as a house, they could not go bankrupt, these days many of these arrangements are mis-sold to people, either because there debt is too small and a DMP would have proved a better choice, or they had no assets, large debts, and should have gone bankrupt instead.

Yet the selling of IVA`s is a profitable business, fee`s are charged on all arrangements, but they can vary significantly, debt management companies tend to push them as they make money for them, people go to them for advice, not realising they are talking to a salesperson, not a debt adviser, they are basically selling you the thing, even though it may not be the best choice for you, and this problem is widespread.

Typically (and not allowing for personal circumstances) for an IVA to work for you, you should be a homeowner, have over 30k of debt, and some disposable income, if you have large debts and rent, consider bankruptcy or debt management, debts under 20k, you should look into a DRO instead.

Consumerist

I don't think we've seen the worst of it yet. I suspect that the latest round of changes to overdraft charges is going to continue the upward trend of debt-repayment arrangements into next year.

alexhassan

Thankfully I am not in debt, but see the number of options of help providers and routes out as very confusing. True, there is free and impartial advice out there (well someone must be paying for it). Looking at moneyadviceservice there are six providers and on stepchange eight different routes. (Okay, there are four sets of legislation in the UK) The solution seems to be a multipronged approach of educating young people, informing those in persistent debt about a simple set of options (not 48!) and legislating against predatory practices in the financial industry. Clearly focussing on the last one hasn't proved effective.