IVAs ‘Not Best Option’ For Those In Debt
Keywords: debt, problems, consolidation, loans, credit, cards, finance
Britons are showing a lack of awareness when it comes to methods of managing their debts, a new study has shown.
According to a study conducted by moneysupermarket, about half of Britons (49 per cent) claimed to not know what an individual voluntary arrangement (IVA) is. However, given the high levels of advertising the product is receiving and increasing concern over debt levels, the price comparison website claimed that it is “staggering” that so many people are unaware about what the arrangement, which may be taken out by those struggling to pay off loans and credit cards, actually involves.
Meanwhile, government research has shown 11,105 IVAs were taken out in England and Wales between April and June - a rise of 35 per cent from figures recorded during the previous quarter. However, moneysupermarket suggested that many of those signing up for the agreement may not be truly aware of what they are getting themselves into.
Overall, young people were shown to have the least amount of knowledge about the product as 64 per cent of 18 to 24-year-olds are unable to say what it actually it. The findings also showed that men possess a greater awareness as 42 per cent claim to not know what the product is, in comparison to 56 per cent of women.
More than half of Britons surveyed stated they would consider getting an IVA if they developed “serious” problems in making repayments on personal loans and other forms of borrowing. With 40 per cent claiming that they would only do so as a last resort, 17 per cent reported that they are a good alternative to being declared bankrupt. As a result, moneysupermarket suggested that consumers are unaware of the arrangements’ “true consequences”.
Tim Moss, head of debt for moneysupermarket, suggested that opting for an IVA is unlikely to be the best option for the majority of borrowers in the long-run. He said: “For people suffering from spiralling debts, an IVA might seem like an ideal escape route. However, an IVA is not something that should be entered into lightly and without considered thought. It is a serious financial agreement with creditors that will typically last five years. Once entered into, it will make obtaining any forms of credit, even for such everyday items as a mobile phone contract, almost impossible.”
“There are many simple and practical steps people can take to get to grips with their financial situation before taking a drastic step such as declaring bankruptcy or entering into an IVA,” Mr Moss added. He claimed that consumers struggling to pay back money owed on loans and credit cards should look to seek advice from a professional advisory service such as Citizens Advice. Meanwhile, reducing unnecessary expenditure and switching to competitively-priced borrowing products was also suggested. In addition, taking on a second job as a means of bringing in extra cash was revealed to be a way of managing debts.
Last month, Ian Boden-Smyth, spokesperson for the UK Insolvency Helpline, claimed that creating a budget should be the first step taken by those with seemingly unmanageable debt difficulties. He added that asking for guidance from professional advisory organisations, in addition to opting for a debt consolidation loan, could also be a way in which to get their finances back into the black.
Abbi Rouse writes for All About Loans. Visist us today to apply for secured loans, personal loans, and debt consolidation loans. Visit today www.allaboutloans.co.uk
Previous Articles Highlighter:
How To Get A Stafford Loan (1)
Ford Federal Direct Loan. Both of these loans are similar in terms and conditions and the amount you can receive to help pay for college tuition. Both loans require that you fill out a Federal Student Aid Application known as the FAFSA and then you submit it to your school to see what they will be willing to offer to help pay for the 4 years of college.
Your Dental Insurance Plan - What You Need To Know (2)
Key Factors in Buying Your Dental Cover The best cover offers a lot of preventive care for free or very inexpensively. This is in place to encourage simple steps that in the long-run save you a lot of money.
School Term 'Might Not Mean Store Cards' (3)
According to Credit Action, a national money education charity, store cards can be "an expensive way to borrow," with annual percentage rates (APRs) significantly higher than on many other financial products.
Intellectual Property And Estate Taxes (4)
This is no longer restricted to the large Multi National Corporations or the affluent few. Everyone has the right and the capability to develop such property with the help of copyrights, trademarks or inventions that can be patented.
Contract Hire Or Contract Purchase - What Are Your Choices? (5)
Road fund licence included for entire contract. Percentage of the rentals allowable against tax(Business Users). Contract Purchase This is an alternative type of contract that gives you similar benefits to contract hire but with the option to purchase your vehicle at the end of the contract, this is called Contract Purchase and as before can be done through your business or personally for private individuals.
Car Leasing Facts You Need To Know (6)
Leasing a car is not the same as taking out a car loan. The largest payment that is required is the initial deposit and that is usually only about one, two or three months total of the monthly lease payments.
Business Succession And Estate Tax Planning Strategies (7)
Select the right individual to handle the company in your absence- Select a person, whom you find capable to navigate through the minefield. This is necessary if you have more than one qualified successor.
Futures Trading - The Good, The Bad And The Ugly! (8)
A good trader always remembers that even the best traders lose sometimes. The main thing day futures trading can guarantee you is that you will lose at some point.
Basic Principles Of A Loan (9)
In some cases, the initial interest-only payments are lower than the principal payments. This allows the borrower, who expects to earn more profit over time, to obtain a larger loan.
Federal Student Loan Consolidation - Get Your Facts Straight Now! (10)
These rules are relaxed for the income sensitive repayment option. The most popular choice is the standard repayment. The payment always stays the same. If you choose any loan beside the standard repayment, it does not mean you are locked in.
5 Reasons To Fail In Day Trading (11)
A plan also takes into consideration all the things that might go wrong, and prepares you for them. 4. Not being able to accept a loss : Trading always carries a risk.
How To Use A Secured Credit Card (12)
There are some companies that will charge ridiculously high fees that will reduce your initial deposit before you even use the card. Stay away from those companies. Look for companies that have no fees whatsoever or for those companies that charge a small one-time fee to set up the account.
What If I Miss A Home Loan Payment? (13)
You might be surprised at how eager they can be to help. They may suggest that the payment be tacked on to the end of the loan or they may ask if you can pay the late payment in installation payments such as one-third of the late payment added to each of the next three monthly payments.
Can You Use Student Loans To Pay Off Credit Cards? (14)
Student loans tend to have lower interest rates than credit cards and when they do then this will make sense to use it because often you don't have to worry about paying off student loans until six months after school is done, but with a credit card they tend to be monthly payments.
Student Loan Consolidation Information - How You May Obtain No Credit Loans (15)
A large majority of students, therefore may need to look for a loan in addition to a Pell Grant to fund their education, there are a range of loans that are need-based, one of the better general loans is a Stafford Loan, which comes in two products.
The Best Credit Card Offer Is Still Possible (16)
You will find out that it is already stated in the application which is pre-approved. This type of card is offered mostly by stores and banks. Keep in mind that a credit card is just a modern term for borrowing money.
Lake Arrowhead - A Sight To Behold (17)
Lake Arrowhead is an exceptional residential lake and golf community so close to the conveniences and attractions of the south's largest urban center, yet so very far away from the hustle and bustle of the big city.
Texas Children In Danger Again: Bush's Restrictions On The Children's Health Insurance Program (18)
Under Bush's guidelines, states must enroll ninety-five percent of eligible children below 200% of the federal poverty level, in either Medicaid or CHIP, before expanding coverage to include higher-income families.
Tips On Easy Estate Planning (19)
For your other investments you can initiate a living trust to stockpile the assets. You may also have property or other assets that you own in another state or country.
Understanding The Need For Proper Estate Tax Planning (20)
Keywords: Sacracmento CPA, Sacramento Estate Tax Planners, Tax Planning, Estate Tax Planning, Estate Planning The government provides estate tax as a levy against the taxable estate of a deceased person. Taxable estate is gross estate that is reduced by some allowable deductions.
Newer Articles Highlighter:
New Study Reveals Rise In Financial Confidence (1)
Next month it will be interesting to see if consumers continue with this upbeat attitude, or if the threat of more interest rate increases, more rain and an unstable US market begin to take their toll." And with elements of the GfK NOP study revealing some concern about consumers' financial outlook, those worried about managing their finances could be well advised to take out a debt consolidation loan to rein in their monthly outgoings.
Need A Mortgage Loan? Don't Get Anxious...Get Excited (2)
At the time of making a mortgage loan for purchase of a property, lenders by and large require that the borrower to make a down payment, i.e. , contribute a percentage of the overall price of the home.
Real Estate Investing, An Honest Way To Make Money (3)
It is not dishonest in any way. In fact, real estate investing is hard work! Real Estate Investing is Also Speculation There is a very high earning potential in real estate investing because real estate investing is speculation.
Forex - Forex Trading 101 - A Basic Understanding (4)
You can also invest a modest amount for a Forex simulator, which allows you to explore a never-ending variety of market conditions and see the impact they've had on currencies in the past.
British Tory Tax Plans Could Hit Tax Havens (5)
Surprisingly perhaps for a tax haven, mortgages for a property are as available as many European countries, with rates around the same level. Up to eighty per cent of a property's value is often agreed by the banks in Andorra.
Student Loan Consolidation Information - What Are PLUS Student Loans (6)
With PLUS loans parents are able to borrow up to the total amount of education minus any other financial aid money the student is awarded, though PLUS funds are not cheap they may make the difference when picking out which school to attend or whether to attend at all, however since PLUS loans aren't need-based they do include a credit check, in this situation the student's credit (with one exception discussed below) is not looked into, it's the parents credit history which matters since they are the signers of the promissory note, they alone are responsible for the repayment of the loan.
Lack Of Planning 'Could Cause Financial Difficulties For Families' (7)
If you don't set yourself limits then you're not going to stick to them. It's quite usual, unfortunately, that one of the reasons why people get into debt is because they have had children and not been able to plan financially".
Vintage Sports - Car Club (8)
Keywords: cheap vintage car insurance, classic car insurance All vintage car enthusiasts will no doubt be interested in The Vintage Sports - Car Club whether they own one, enjoy modifying them or are simply looking for car parts or cheap vintage car insurance.
Homeowners 'Feel Pressure' Of Interest Rate Rises (9)
However, it was suggested that young people are"most likely to feel the bite" on their monetary situation during the past three months as more than a third (37 per cent) of 25 to 34-year-olds have used cash intended for a rainy day to make up for frittering away too much money in other areas.
What Is A Debt Consolidation Loan? (10)
A debt consolidation loan is the replacement of multiple loans with a single loan. One of the benefits of a debt loan is that the borrower will often see a lower monthly payment and a longer repayment period.
Repossessions Levels 'Increasing' (11)
"Encouragingly, the annual growth rate in repossession orders has eased back in 2007 having risen quite sharply during the back end of 2006. However, Rics estimate that repossessions will continue to climb higher into 2008 and could exceed 45,000, a rise of 50 per cent from current annualised rates." Overall, the highest concentration of auctioning was shown to have taken place in the north-west of England where some 826 homes were sold via such a method during the three-month period.
UK Pension Gap 'Widens' (12)
"But irrespective of the means, it is important action is taken and serious provisions are made," Mr Wolanski pointed out. And with millions of consumers struggling to save into pensions, problems managing their money may extend into other areas of their finances such as developing difficulties in paying back loans and credit cards.
Individual Health Insurance Plans - What You Need To Know Before You Buy (13)
The good news for consumers is there are many companies fighting for your health insurance business which brings prices down. First Steps - What Do You Need? What should you look for in individual health insurance?
Holiday Insurance - A Very Valuable Expense Indeed (14)
There are companies who will cover your lost holiday for any reason at all, though this will cost more, of course. Others have specific situations that they will cover, whilst others are not.
How To Buy Your First Investment Property (15)
It's one of my favourite 'right-to-the-point' books on real estate. The 100-1 rule stipulates that if you were to look at 100 properties, you may end up buying one good deal!
Utilise Your Tenants (16)
For example, you could ask your tenants to do a lot of the simple upgrading tasks on your property for you. I have often asked tenants to paint my properties for me!
Mortgage Glossary Of Terms (17)
Reducing Term Assurance is designed to repay the balance outstanding on a repayment type mortgage upon death. Term Assurance may also pay out early on the diagnosis of a terminal illness.
Debt A Glossary Of Terms (18)
Unsecured Debt - A debt that is not tied to any item of property. Credit card debt is an example of unsecured debt. 1st Finance Guide features help and advice on debt consolidation (debt.1stfinanceguide.com amongst other general finance (www.1stfinanceguide.com) matters.
Insurance Glossary Of Terms (19)
Unitised With Profits Fund - Also known as a Unit-Linked With Profits Fund. A type of Life Fund that can invest in UK and overseas shares, property, fixed interest securities and cash.
A Brief Commercial Mortgage Guide (20)
Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact.