The IVA Argument: Adding Fuel to the Fire

The information, figures and statistics having that have been published by leading bodies within the personal finance sector this week has provided a concerning and bleak outlook on the state of the market. While reports on the health of the finances of major corporations within the financial sector have determined that the number of business insolvencies has fallen, suggesting the tentative initial move towards economic recovery, news released today predicts a dire increase in the incidences of personal insolvency.

David Brown investigates the statistics released today suggesting that levels of personal debt in the north of Great Britain have reached such a crippling point that individuals are failing to meet payments essential in the cost of living.

The news that has broken today following the release of statistics from a set of surveys conducted by the Citizens Advice Scotland organisation has mainly documented the exposure of a considerable crisis within the personal finance sector. Individuals are struggling under immense burdens of debt and, as a consequence, are encountering situations whereby they are required to prioritise repayments towards consumer credit debts above payments towards costs essential to living, such as food and fuel.

This information is supported by the statistics released by the British energy company Scottish and Southern Energy. In a statement issued today, SSE informed the financial sector that there had been a significant increase in the amount owed in fuel bills, with a notable rise in the amount of payments from lengths of time surpassing six months. The company detailed that over the 9.15 million customers it supplies energy to a total figure of £103 million in payments are outstanding, having increased from a figure of £73 million outstanding in 2008.

Analysts are concerned that the forecasted and expected rise in the cost of fuel and energy combined with the substantial rise in unemployment documented earlier on this week will have ramifications that may necessitate a further surge in personal insolvencies, such as a single, assisted or joint IVA or the Scottish equivalent, Protected Trust Deed. Applying and engaging with a formal debt agreement is advised typically for individuals who are in serious financial difficulty, the prevalence of which, as emphasised by the statistics released this morning, is unarguably increasing at an alarming velocity.

While the information on the struggles currently being experienced by Scottish individuals in the wake of the economic recession presents a concerning prediction of the future of personal finance, their English and Welsh counterparts are encountering similar difficulties. The Insolvency Service today published evidence that 17,000 individuals had entered into IVAs or debt relief orders within the third quarter of this year, and the statistics detail an overall rise of 28.2 percent in the occurrence of insolvencies since 2008.

With the prevalence of corresponding statistics and the recognition that there is a serious impending crisis within the personal finance sector, it is crucial that independent, professional advice be readily available and the stigma of debt be eradicated in order to enable more individuals to seek help before severe debt solutions become necessary for personal financial health.

This article was written by David Brown on behalf of IVA.net - a website offering free information, tools and guides on debt and debt solutions for individuals experiencing financial difficulty.