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Consultation on debt management launched Govt aid for those struggling with mortgages `too late for some` Pensions `no problem` for IVAs UK reaping what it has sown in terms of personal debt, expert claims Struggling consumers `likely to default on TV subscriptions` Consumers `struggling to cope with mounting debt` Bankruptcy increases by 7% `More Brits applying for personal loans` 70% of Brits `without unsecured loans` Pre-paid cards `more popular as debt rises` IVAs `a real alternative` to bankruptcy Brits `trying to escape credit crunch` by moving abroad West Sussex consumers suffering debt IVA agreements increase Industry body welcomes IVA mailing probe OFT to target bogus IVA companies IVAs can be "helpful" for large debts IVAs - consumers warned about bogus deals Insolvency rates rising IVAs can be "better option" than bankruptcy

IVA decision `shouldn`t be taken lightly;`

14/01/2008

Consumers wishing to take out an Individual Voluntary Arrangement (IVA) should make sure they do not take the decision lightly, a financial expert has warned.

With as many as 120,000 UK consumers predicted to be considering applying for an IVA or bankruptcy in 2008, many will rush into the move due to rising debt problems, according to the Observer.

Writing in her weekly column in the newspaper, Lisa Bachelor said that the IVA system was helpful for those most in need as an effective way to sort out major debt problems.

However, a new code of practice in the industry means that more of the debt will have to be paid off than when the system was set up.

Ms Bachelor added: "Homeowners in particular need to be careful: the new code of practice means they will have to agree to release some of the equity in their homes, either through a secured loan or through remortgaging, near the end of the five-year plan."

An IVA is a formal agreement between the debtor and their creditors to make reduced payments of the debt over a five-year period. At the end of that time, the debt is classed as settled.

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