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`Greater consumer awareness` fuels IVA growth

26/09/2007

The take-up of individual voluntary arrangements (IVAs) is growing due to "greater consumer awareness", an industry expert has claimed.

Debtors are afforded "greater autonomy" with an IVA rather than going through bankruptcy, although through an IVA, the debt takes longer to pay off, a director of the Debt Advice Bureau said.

IVAs were introduced under the 1986 Insolvency Act as an alternative to bankruptcy. Under the terms of an IVA, the debtor and their creditors, with the help of an insolvency practitioner, arrange a monthly repayment scheme over a period of time - usually five years.

Stephen Rose, of the Debt Advice Bureau, said: "With an IVA, if you have sufficient available income, if you have the correct assets – the equity in your home or whatever – then under an IVA you can pay back everything you owe, plus all the costs related to the setting up and administration of the IVA, plus statutory interest."

Government statistics show there were 10,698 IVAs taken out in the second quarter of 2007.

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