IVA Advisory Centre

September 17, 2010 12:05 ET

Prompt Action Could Stop Debt Becoming Unmanageable

The IVA Advisory Centre reminds borrowers that taking early action on problem debts can often greatly reduce the chances of those debts become unmanageable

MANCHESTER, UNITED KINGDOM--(Marketwire - Sept. 17, 2010) - After Bank of England figures showed the highest levels of debt write-off by banks and building societies on record, the IVA Advisory Centre reminded borrowers that taking action early can often prevent debt problems from becoming unmanageable.

But the company added that many more cases are almost unavoidable, and in these cases debt solutions such as bankruptcy or an IVA (Individual Voluntary Arrangement) may be the borrower's best option.

The Bank of England's latest figures show that banks and building societies wrote off a record £3.5bn of personal debt in the second quarter of this year.

This was mostly made up of debt from credit cards (£2.1bn), overdrafts, personal loans and hire purchase agreements (a combined £1.2bn) and mortgages (£184m).

A debt expert at the IVA Advisory Centre said:

"These figures suggest that debt is still a major problem for many people. However, with early action many cases of debt solutions that require debt write-off could be avoided.

"Writing off debt may seem like an easy way out, but it nearly always comes at a point where the borrower's credit rating is already severely damaged. Debt solutions such as bankruptcy and IVAs involve writing off unaffordable unsecured debts - and while these solutions can be very helpful, they carry a range of adverse consequences.

"With that in mind, it's better for borrowers to take action as soon as they realise they have a problem with their debts. Even if it's only a minor difficulty, it's worth speaking with an expert debt adviser to ensure they are dealing with their debts in the most appropriate way.

"The earlier borrowers address problems with debt, the easier it should be to find a solution to help them."

Notes to Editors

The IVA Advisory Centre offers expert debt advice, as well as IVAs and a range of other debt solutions for people facing financial difficulties.

For more information, visit the IVA Advisory Centre website at http://www.ivaadvisorycentre.co.uk.

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