IVA & Debt Consolidation Advice

Informal voluntary arrangements, also known as IVA’s are becoming very popular, especially for large debts as the average debt for someone filing an IVA is 60,000 euros.

More and more people are using IVA to get rid of debt without having to file for bankruptcy. In fact, people as young as 19 are acquiring IVA’s from their creditors. So far, more than $630 million euros have been written off due to IVA’s and chances are, this number will escalate greatly over the next few years as the popularity of the IVA grows.

KPMG head of personal insolvency Steve Treharne said: “Typically the sort of debts we are talking about here are personal loans, credit card balances and other forms of 'buy now, pay later' unsecured loans. Most of the money is borrowed to meet current expenditure, such as holidays, rather than to acquire assets. Given the average level of debt, too many people are borrowing money that they have no realistic hope of repaying. Creditors, in the right circumstances, also prefer this as a way forward, as they see a significantly greater return on their money than they would do from bankruptcy.”