(PRWEB) December 31, 2006
The IVA is proving an increasingly popular method of avoiding bankruptcy as insolvency levels continue to rise in the UK. However, debt help experts The Debt Counsellors insist that too few people are seeking professional debt advice for their debt problems and risk bankruptcy as a result.
The IVA, or Individual Voluntary Arrangement, was introduced in 1987 to help people with serious debts avoid bankruptcy. Accountants KPMG say that £1.4 billion of bad debts have been written off during 2006 through the IVA. However, the firm also say that around 110,000 people have become insolvent during the last 12 months and government statistics show that personal bankruptcy is still a growing problem.
According to the Insolvency Service, in the third quarter of 2006 there were 15,416 bankruptcies, an increase of 2.7% on the previous quarter and a rise of 26.6% on the corresponding quarter of 2005.
The increase in bankruptcy is consistent with the UK's rising total of personal debt, now around £1.3 trillion and increasing by approximately £1 million ever four minutes.
With this is mind, The Debt Counsellors say it is imperative that people worried about bankruptcy seek professional debt advice as soon as possible.
John Porter, a senior counsellor with The Debt Counsellors, said: "IVA levels are increasing as people are looking to avoid bankruptcy, but the figures also show that personal bankruptcy continues to rise.
"The UK is in the grip of a serious personal debt problem and it is essential that those people who are affected face up to their situation and contact a professional debt counsellor who can give help and advice on the best way out of the situation according to the individual circumstances."
Porter adds: "In many cases of serious debt, bankruptcy can be avoided and the best way of finding out how is contacting a debt counsellor.
The Debt Counsellors offer free, confidential advice on bankruptcy and all kinds of debt problems. For more information, see: http://www.debtcounsellors.co.uk