Last year, 27,100 properties in the UK were repossessed. This year, the Council of Mortgage Lenders (CML) expects around 45,000 – a figure which highlights the difficulty some homeowners are experiencing as they struggle to make larger mortgage payments without neglecting their unsecured debts. In many cases, the most effective way to ensure adequate funds for the former is to bring the latter under control. This is one of the key benefits of an IVA (Individual Voluntary Arrangement).
“Like tenants, homeowners throughout the UK are facing steady increases in the cost of living,” says a spokesperson for Debt Advisers Direct. “But many are also being hit with rising mortgage costs, especially those coming to the end of their mortgage terms and looking for an affordable new fixed-rate deal. For many of them, the only way to make their increased mortgage payments is to reduce the cost of their unsecured debts. After all, there’s only so much they can do to cut back on their discretionary spending. When that isn’t enough – and when they’re facing significant levels of debt – an IVA can be their best way forward.”
“2007’s repossession figure was a real wake-up call: the last time we saw more repossessions was back in 1999, the final year in a decade in which nearly half a million properties were repossessed. Although the 90s started under very different conditions, with the Bank of England’s base rate at nearly 14%, it’s still worrying to see repossessions once more rising to this kind of level.”
A form of insolvency, an IVA is a legally binding agreement between an individual and their creditors. The individual agrees to make fixed monthly payments for (normally) five years, based on what they can afford after essential living expenses. The creditors agree to freeze interest, not to take any legal action, and to write off the outstanding debt at the end of the IVA.
So an IVA delivers both short- and long-term benefits. It reduces the individual’s monthly repayments to unsecured debts, freeing up money for mortgage payments and other essentials. Like bankruptcy, an IVA writes off their outstanding unsecured debt and lets them make a fresh start – but unlike bankruptcy, it also helps them protect their home.
About Debt Advisers Direct
Debt Advisers Direct helps people with financial difficulties, providing free advice and tailor-made debt solutions. The company is part of the Think Money Group, one of the UK’s leading financial solutions providers. Think Money is headquartered in Salford Quays, Manchester, and employs around 600 employees to deliver a comprehensive range of debt, loan and banking solutions. It defines its mission as ‘To educate, rehabilitate and advise on all aspects of financial management’.
For more information, contact Melanie.Taylor@debtadvisersdirect.co.uk (0845 056 6480) or visit the Debt Advisers Direct website at http://www.debtadvisersdirect.co.uk/.
This press release was distributed by ResponseSource Press Release Wire on behalf of Debt Advisers Direct in the following categories: Personal Finance, for more information visit https://pressreleasewire.responsesource.com/about.