IVAs and the slowing economy
on: October 10, 2008, 11:04 am
Release Author: Debt
Release Summary: Responding to the ONS report of 0% growth in
Q2, DebtAdvisersDirect.co.uk remind borrowers that an IVA (Individual
Voluntary Arrangement) can represent a straightforward, reliable
solution to their financial problems.
Release Body: In response to economic data from the Office for
National Statistics (ONS), debt experts DebtAdvisersDirect.co.uk
remind consumers that the right debt solution can help them regain
control of their debts, despite the unpredictability of the UK’s
30 September, the ONS confirmed that GDP growth (Gross Domestic
Product – a measure of economic activity) had been 0.0%
in the second quarter of 2008, down from the 0.3% reported for
the first quarter.
other words, although the UK economy isn’t in recession
(usually defined as two consecutive quarters of negative growth),
nor is it experiencing growth – the usual state of affairs
under ‘normal’ circumstances. More worrying yet, the
economy would have to decline only slightly for the remaining
six months of the year to be officially classed as ‘in recession’.
may be hard for people to see such macro-economic statistics as
relevant to them as individuals," stated a spokesperson for
Debt Advisers Direct,
"but the impact is all too likely to make itself felt in the average
UK citizen's daily life. In general, a slowing economy means everyone
has less money: not just employees and employers, but the government
itself. Given the rapid rises we've seen in the cost of living,
any threat to a household's income should be taken extremely seriously.
with high levels of debt, struggling to keep up with their debt
repayments, are particularly likely to worry about the effects
of a slowing economy. There may be little they can do to influence
their utility bills, the price of food, or even their job security,
but there may be something they can do about their debts - whatever
debts an individual is facing, if they become unmanageable, there
are a range of debt
solutions available that could help reduce their payments
and bring their debts under control."
people with unsecured debts of around £15,000 or more, an
IVA (Individual Voluntary Arrangement) may be the most appropriate
debt solution. An alternative to bankruptcy, an IVA is a form
of insolvency that helps people bring their monthly debt repayments
back down to an affordable level and – in the longer term
– clear those debts entirely.
IVA is a legally binding agreement between an individual and their
creditors. In brief, the individual agrees to make fixed monthly
payments for a set period (normally five years), based on what
they can afford to pay after taking essential living expenses
into account. If they own their home, they may also be required
to free up equity in their home (towards the end of the IVA) to
increase the amount they can pay their creditors.
a big commitment, but their creditors will, in return, agree to
freeze interest, not to take any legal action (such as pushing
for bankruptcy) and to write off any outstanding debt once the
IVA has successfully concluded. So an IVA can deliver clear benefits
to borrowers and creditors alike.
should the borrower's circumstances change during the course of
they can request an 'IVA variation' - it's in the creditors' interests
as well as the individual's to make sure the IVA succeeds, so
they may well agree to alter the terms of the agreement if this
is clearly the best way to bring the IVA to a successful conclusion."
Details: Melanie Taylor
0845 056 6480
South Langworthy Road