Money News
With the shop tills still ringing from the late Christmas rush and the Sales doing particularly brisk business, new research from personal insolvency specialists, W3 Debt Solutions, shows that Xmas overspending has triggered a dramatic surge in demand for Individual Voluntary Arrangements (IVAs).
It recorded a 58% rise in demand for IVAs last month compared to December 2005. And early indications in January already point to 2007 being a record year for personal insolvencies, with enquiries already on trend to be more than double the December numbers.
The demand for debt advice is particularly strong among the young, with people aged 30-40 accounting for almost four in ten of those with serious financial troubles contacting W3 Debt Solutions.
IVAs are very much in the news at the moment, as more and more people have become aware that they offer a way out of a serious debt problem. In fact, the latest figures released in November from the Department of Trade and Industry recorded a 119% rise in the number of IVAs since Q3 2005.
Despite the rising popularity of IVAs, W3 Debt Solutions Chief Executive, Greg Mullarkey, has detected a hardening in attitude by lenders such as credit card companies and banks in the last three or four months. He says these lenders are much less willing to enter into IVAs than they had been previously, fearing that they're being seen as the easy option to escape debt.
Mullarkey adds that if creditors continue to adopt a harder line on IVAs, a lot more people will be going down the bankruptcy route this year. While in some instances bankruptcy may be the most appropriate measure, in others it is not.
If you are heavily in debt make sure you get the right advice. But be warned, bankruptcy still carries considerable social stigma and will affect a person's ability to get credit, including credit cards, loans and mortgages. It may even affect their ability to rent property.
03 January 2007 © Moneyextra.com
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