Wednesday 16th April 2008
Hundreds of thousands of Britons could be forced to turn to drastic debt management measures this year as lenders cut the number of refinancing options available to them, a debt management company has warned.
TDX Group calculates that around 800,000 people who have built substantial debts on credit cards and through personal loans will opt for an individual voluntary arrangement (IVA) this year.
Last year official figures show just 400,000 borrowers applied for an IVA.
Mark Onyett, the chief executive of TDX, told the Times: "For the vast majority of people this year, refinancing and re-mortgaging won’t be available as a solution.
"Their choice will be narrowed to bankruptcy, a debt-management plan or an IVA. You could see a doubling of IVAs."
According to the company's research around one million Britons are facing problem debts this year and collectively owe £25 billion.
Companies which provide IVAs charge on average between £5,000 and £9,000 to cover organisation of the agreement.
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