As Personal Debt Spirals Out of Control, More Begin to Look at IVA Options

Press Release : January 06, 2010
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Pre-crisis predictions set the 2009 bankruptcy rate at double that of 2006, and they’ve been proven alarmingly true with the latest wave of debtors failing to repay their mortgages, investment capital, and personal loans. Looking back on the more stable 2006 economy, even the most grim predictions failed to truly capture the difficult financial state that many people now find themselves in.

However, despite the overwhelming rise in debt difficulties, many people are looking at alternatives to bankruptcy. While low-quantity debtors are quickly moving to debt repayment plans and bank approved debt consolidations, those with greater debts are realizing the large downsides to bankruptcy and looking for other options.

One such option is an IVA – individual voluntary agreement – which is a long-term option for recovering and repaying debt. IVA options allow borrowers to avoid bankruptcy – a process that can have major lifelong consequences – and instead create a structured and government approved debt repayment plan.

The story of failed investors fighting their way through bankruptcy has become so common it’s now cliché, but as a real life story it’s hardly frequent. Bankruptcy is the final option for investors and entrepreneurs – an option that carries a huge range of issues – and as a result, more people are turning to solutions such as IVA advice.

Besides alleviating the restrictions that bankruptcy can bring, IVA debt solutions allow borrowers to create a repayment plan for their debts with relative discretion and anonymity. This advantage is perhaps the strongest reason for their popularity amongst businesspeople – for debts over £15,000, IVAs are the ideal option for preserving a professional reputation and image.

With such a large portion of the world’s borrowers operating under the potential threat of bankruptcy, it’s exciting and relieving to see these financial options find support. IVAs are just one of several non-bankruptcy debt relief options, but are typically the most popular option for sizable debts. While borrowers with under £15,000 in debt owing can typically sort out payment plans directly with a bank, IVAs allow private debt management for large debts and loan balances.

While the financial crisis has taught people that borrowed money is quite risky and restrictive in a tight economy, it’s also provided the public with greater faith in debt repayment solutions. There are alternatives to bankruptcy out there, and armed with the knowledge that debt can be managed effectively, it’s highly possible that more consumers will borrow sensibly and invest in manageable spending.

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