IVA & Debt Consolidation Advice

Many people are being convinced into taking out IVAs without being full aware of the long-term consequences, according to Experian.

Many consumers are getting convinced into taking out an individual voluntary agreement (IVA) without fully understanding the long-term consequences, according to a senior figure at Experian.

Managing director, for the UK, Ireland and Northern Europe at Experian, Richard Fiddis spoke out recently against the rising popularity of IVAs as a way for Britain's debtors to take care of their financial situation.

And the financial services themselves in the UK are suffering due to the record amount of IVAs and insolvencies that are being taken out, according to Mr Fiddis.

He said: "Insolvencies rose by two-thirds in the second quarter of this year, while IVAs, which make up almost half the total, soared by over 150 per cent.

"There is evidence that consumers are being encouraged into IVAs without fully understanding the long-term consequences."

Different areas of the country see a significant difference in the numbers of IVAs and bankruptcies, added Mr Fiddis.

Among the young people, filing for bankruptcy is increasingly being seen as a painless way out of debt and many don't realise that taking this step will have repercussions that will last a long time, according to Experian.

Currently the overall amount of personal debt in the UK stands at £1.25 trillion.