Latest Debt News
IVAs up by 75 per cent
20/01/2006 11:22:00
There has been a 75 per cent increase in the number of people turning to individual voluntary arrangements (IVAs) to deal with their debts in 2005, according to new research.
KPMG revealed that, of the 16,000 people who opted for an IVA, the average debt of someone setting one up was £60,000, of which creditors would expect to recover 38 per cent.
The study also found worrying signs of people getting into debt problems at a very young age.
The youngest person to set up an IVA was a 19-year-old who owed £25,000, with several 21-year-olds owing as much as £40,000.
KPMG's Steve Treharne commented: "The sort of debts we are talking about here are personal loans, credit card balances and other forms of buy now, pay later unsecured loans.
"Most of the money is borrowed to meet current expenditure, including lifestyle [purchases] such as holidays, rather than to acquire assets.
"Given the average level of debt, too many people are borrowing money that they have no realistic hope of repaying."
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