MoneySolve

MoneySolve

February 22, 2010 03:00 ET

IVA Advice Sought by Middle Class Professionals

MANCHESTER, UNITED KINGDOM--(Marketwire - Feb. 22, 2010) - The Insolvency Service's recently released statistics on personal insolvencies shed some shocking light on our rising personal debt crisis. In fact, over 134,000 people went bankrupt, entered an IVA or began a Debt Relief Order. And accountancy firm, Grant Thornton, carried out further research which confirmed that the growth in those seeking IVA advice is fastest amongst the middle class professionals. This is somewhat contrary to fairly popular misconception that IVAs are generally taken up by those at the lower income end of the spectrum.

The middle class professionals may indeed have been amongst the demographics thought most able to afford their lifestyles. However, the 18 month recession meant dire consequences for many. Hundreds of thousands of jobs were lost and even those who were fortunate enough to keep their jobs faced the painful possibility of pay cuts. Sudden drops in income are particularly distressing to those living a life on credit and it is thought that this contributed greatly to the overall number of IVAs and bankruptcies. Falling incomes coupled with crashing house prices and reluctance by banks to lend, meant that families who might traditionally have coped with tough financial periods by lending more were unable to do so.

And although the recession came to a formal conclusion in the final quarter of 2009 here in the UK, its effects are likely to stick around for some time yet. It's anticipated that unemployment is likely to remain high throughout this year, with a real possibility that 'normal' levels will not be regained before 2012.

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