IVA : Levels Of IVAs Expected to rise.

Insolvency experts are forecasting another sharp rise in the number of people applying for IVAs (Individual Voluntary Arrangements) as a solution to their debt problems, with some experts forecasting that the number of Individual Voluntary Arrangements (IVAs) will double over the next two years.

Ever rising numbers of indebted people are choosing Individual Voluntary Arrangements (IVAs), clear their debts and thereby avoid the stigma of bankruptcy.

With an Individual Voluntary Arrangement (IVA), a new monthly payment is agreed with the creditors, based on its affordability to the debtor, and creditors guarantee to freeze interest payments on the debt, and write off what debt hasn't been repaid at the end of the Individual Voluntary Arrangement (IVA) term.

However, creditors are becoming frustrated with the rise in number of Individual Voluntary Arrangements (IVAs) being applied for, and the potential for people to think of IVAs as an all too easy solution.

There has been a marked increase in Individual Voluntary Arrangement (IVA) numbers over the last few years. In 1998 there were fewer than 5,000, but according to KPMG, as many as 45,000 people used an Individual Voluntary Arrangement (IVA) as their preferred debt solution in 2006.

Analysis shows that people as young as 21 are carrying debts equal to three times their annual income. The average debt level for each Individual Voluntary Arrangement (IVA) stands at around £52,000 , with the average Individual Voluntary Arrangement (IVA) dividend at 39% of this sum, according to figures from KPMG.

Individual Voluntary Arrangements (IVAs) were originally introduced in 1986,as an alternative to Bankruptcy.

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