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IVAs 'not always the best' for debtors
23/04/2008 12:01:00
Consumers taking out individual voluntary arrangements (Ivas) should "think very carefully" before doing so, a financial expert has claimed.
Fool.co.uk said that financial situations differ from consumer to consumer and as such an Iva, which offers an alternative to bankruptcy without as much damage to their credit rating, it may not always be the best solution.
David Kuo, head of finance with the firm, said that spenders see the scheme as a "mini-bankruptcy".
However, he stated that "Ivas work in favour of the creditors rather than the person who is taking out the Iva" and the advisor "will get paid a handsome sum for doing so".
In some cases, "it is much better for the people to declare bankruptcy in the very beginning", he concluded.
A poll from Co-operative Financial Services, published in March 2008, found that eight out of ten people worried about their debt and the average Briton spends two years of their life thinking about personal financial problems.
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