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Thousands might be declared insolvent
Article Category: IVA (Individual Voluntary Arrangement) Help and AdviceConcern is mounting that this year could be the worst ever for personal insolvencies.
Accountant KPMG has predicted that around 130,000 debtors will enter an Individual Voluntary Arrangement (IVA) in 2008.
Last year more than £1.3 billion was written off as a result of IVAs, which enable an individual in financial trouble to approach their creditors with a plan to restructure debt.
Typically, the lender will accept a lower payment in return for a regular monthly payment until the agreed sum is paid off.
The average amount a debtor owed who entered into an
IVA in 2007 was £50,000, with average amounts agreed to be repaid amounting to around £19,000 per person.
Mark Sands, director of personal insolvency at KPMG, said that most IVAs now deal with people who have built up debts on personal loans and credit cards to fund a lifestyle choice, such as holidays, rather than acquiring assets or funding a business.
"By the time people realise the extent of their problems, their total
debts will have been swelled by interest and charges," he added.
KPMG estimates that over 2,500 people have entered into
IVAs with debts exceeding £100,000 this year.
For more information about IVAs call our advisors on 08000 122 118 for FREE, no obligation help and advice Created on 03/01/2008 14:30:56
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