The number of individual voluntary arrangements (IVAs) is set to soar to over 50,000 this year, according to industry sources. This follows two years in which the number of IVAs has been slightly more than 40,000 per year.
One of the main reasons for the increase is procedural, rather than due to the economic uncertainties. The British Bankers Association, the Insolvency Service and the IVA forum have recently agreed a new protocol for the conduct of IVAs. Previously many IVAs were opposed by the banks, who felt that they were being discriminated against in many cases. This has led to a backlog of cases building up which should clear this year.
Tighter lending criteria prevent many people with loans from obtaining more competitive mortgage deals. The tougher line taken by lenders on arrears and the reduced stigma attached to 'going broke' also have an effect on the numbers. The failure of many lenders to pass on in full the reductions in interest rates set by the Bank of England also means that the relief this should offer has not been felt by many.
If you have problems meeting your debts take advice earlier rather than later.
