You are here: Home - Uncategorized -

Ditch your debt

0
Written by:
03/03/2006

The Government is set to reveal plans to make it easier for people to take out Individual Voluntary Arrangements (IVAs), rather than apply for bankruptcy. Mike Collins reports

Mindful of the UK’s growing debt problem, the Government is planning to introduce a ‘Simple IVA’ by the end of the year to help more people to apply for the debt repayment programme rather than having them forced into bankruptcy.

At the moment, creditors responsible for 75% of the value of an individual’s debt have to give approval if an IVA is to be offered to debtors. This is expected to be reduced to 51% for those with debts under £75,000.

However, proposals to introduce another tier of IVA, which would have allowed anyone with debts under £25,000 to be automatically approved for an IVA, have been scotched.

The law relating to IVAs at the moment has its roots in the 1986 Insolvency Act and was initially designed to resolve the complex debts generated by businesspeople and entrepreneurs. But with the UK’s debt mountain now topping £1 trillion, ordinary consumers are increasingly utilising the facility.

Financial adviser Martin Cunningham said: “It’s about time the legislation was changed as more than 47,000 people declared themselves bankrupt last year, and the economy could be damaged if this rate was to continue or even accelerate, as it seems to be doing.

“It is important to simplify the process and start reversing the damage done to the wealth of the nation by years of easy credit. The Government, along with the lenders, must do its bit in reducing the scale and severity of the debt problem,” he concluded.

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Compulsory meters introduced

The Government is to allow a water company to introduce compulsory water meters in the first deal of its kind.

Close