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IVA debt solutions have been extremely popular over the last few years but there is reason to believe that the IVA industry is shrinking in size with only the main players, such Debts.org, able to survive. IVA debt help became something of a dream ticket for many people who saw the chance of clearing up to 70% of their debt too good to refuse.
The tens of thousands who applied for individual voluntary arrangements every year has made banks and other credit providers weary. At the request of banks and other lenders, tougher restrictions were imposed on budgets.
In the course of a IVA, Insolvency Practitioners negotiate a budget with creditors and applicants to determine how much the creditor receives over the IVA term. Tighter restrictions meant more was to be given to creditors, which has had a serious knock-on effect throughout the IVA debt industry.
With IVAs becoming less popular over the last 12-18 months, people have instead been turning to bankruptcy. IVA providers have been going out of business and independent practitioners have seen their fees deteriorate.
It is expected that before the recession is over we shall witness a boom in bankruptcy while IVAs will become the less favoured option. Job losses and inflation will mean consumers are unable to offer creditors any stake in their income through an IVA or otherwise. To think that IVAs would dwindle in popularity would have seemed outrageous only a few years ago.
There is a commonly held misconception regarding the kind of people who apply for an IVA. For instance, not everyone is on a low income, as TDX research proves. In the third quarter of last year, the average wage for someone involved in an IVA programme was £24,000. Which is around twice the annual salary of low-income earners.
Furthermore, £24,000 marked a 10% rise on figures for the previous quarter, showing that people, who could obtain credit as a means of repaying other debt, were now no longer able to do so.
Individual voluntary arrangement’s can clear a range of unsecured debt. Remember, unsecured means you have not used your home or other asset as guarantee you will repay the debt.
IVA can reduce or clear:
If you currently have unmanageable unsecured debts such, such as an overdraft, store cards, credit cards and loans, an IVA could be help.
For more information visit our IVA Loan or IVA Mortgage pages.
