leading debt management has predicted that over the next few years, the number of people opting for individual voluntary arrangements (IVAs) will double as more people look to wipe out some of the debt that they owe. By signing up to an IVA, those in debt can often write off 75% of what they owe and avoid the daunting prospect of bankruptcy. An IVA works by setting a fixed amount that must be paid on a monthly basis, and in retuWith one third of all debt in Europe owed in the United Kingdom, and some say with IVAs (individual voluntary arrangements) becoming increasingly more popular, it’s never been easier to write bad debts off. As the New Year approached, many experts were anticipating the number of people filing for insolvency to increase again, even above the record insolvency rates of 2006. It was expected that almost 30,000 people will become insolvent in just the first quarter of 2007, with almost 10,000 or a third going insolvent for overspending during the holiday season according to the accountants Grant Thornton. "Last year, during the period straight after Christmas ... we witnessed the highest-ever amount of people going into personal insolvency. This year things could be even worse," said Mike Gerrard, of the firm's personal insolvency section. Apart from overspending, an increase in unemployment, increasing energy bills, and a hike in interest rates, will also likely push more people over the debt precipice.

Recently, the charity Citizens Advice has helped to urge those who may have overspent during the holiday season this year to get a "debt detox". Citizens Advice offices from across the UK have already worked with more than ?1.4m worth of new debt problems this year, which amounts to a staggering 5,300 every working day.

Debt problems are nothing new to Britons. Just 18 months ago, the total net amount borrowed by individuals in the UK and Wales passed ?1 trillion and is currently almost ?1.3 trillion. According to the latest reports, this figure is rising by ?1m every four minutes and according to the consumer group Credit Action, almost one in 10 people show signs of "financial stress".

A leading debt management has predicted that over the next few years, the number of people opting for individual voluntary arrangements (IVAs) will double as more people look to wipe out some of the debt that they owe. By signing up to an IVA, those in debt can often write off 75% of what they owe and avoid the daunting prospect of bankruptcy. An IVA works by setting a fixed amount that must be paid on a monthly basis, and in retu

olvent in just the first quarter of 2007, with almost 10,000 or a third going insolvent for overspending during the holiday season according to the accountants Grant Thornton. "Last year, during the period straight after Christmas ... we witnessed the highest-ever amount of people going into personal insolvency. This year things could be even worse," said Mike Gerrard, of the firm's personal insolvency section. Apart from overspending, an increase in unemployment, increasing energy bills, and a hike in interest rates, will also likely push more people over the debt precipice.

Recently, the charity Citizens Advice has helped to urge those who may have overspent during the holiday season this year to get a "debt detox". Citizens Advice offices from across the UK have already worked with more than ?1.4m worth of new debt problems this year, which amounts to a staggering 5,300 every working day.

Debt problems are nothing new to Britons. Just 18 months ago, the total net amount borrowed by individuals in the UK and Wales passed ?1 trillion and is currently almost ?1.3 trillion. According to the latest reports, this figure is rising by ?1m every four minutes and according to the consumer group Credit Action, almost one in 10 people show signs of "financial stress".

A leading debt management has predicted that over the next few years, the number of people opting for individual voluntary arrangements (IVAs) will double as more people look to wipe out some of the debt that they owe. By signing up to an IVA, those in debt can often write off 75% of what they owe and avoid the daunting prospect of bankruptcy. An IVA works by setting a fixed amount that must be paid on a monthly basis, and in retu

nding, an increase in unemployment, increasing energy bills, and a hike in interest rates, will also likely push more people over the debt precipice.

Recently, the charity Citizens Advice has helped to urge those who may have overspent during the holiday season this year to get a "debt detox". Citizens Advice offices from across the UK have already worked with more than ?1.4m worth of new debt problems this year, which amounts to a staggering 5,300 every working day.

Debt problems are nothing new to Britons. Just 18 months ago, the total net amount borrowed by individuals in the UK and Wales passed ?1 trillion and is currently almost ?1.3 trillion. According to the latest reports, this figure is rising by ?1m every four minutes and according to the consumer group Credit Action, almost one in 10 people show signs of "financial stress".

A leading debt management has predicted that over the next few years, the number of people opting for individual voluntary arrangements (IVAs) will double as more people look to wipe out some of the debt that they owe. By signing up to an IVA, those in debt can often write off 75% of what they owe and avoid the daunting prospect of bankruptcy. An IVA works by setting a fixed amount that must be paid on a monthly basis, and in retu

nts to a staggering 5,300 every working day.

Debt problems are nothing new to Britons. Just 18 months ago, the total net amount borrowed by individuals in the UK and Wales passed ?1 trillion and is currently almost ?1.3 trillion. According to the latest reports, this figure is rising by ?1m every four minutes and according to the consumer group Credit Action, almost one in 10 people show signs of "financial stress".

A leading debt management has predicted that over the next few years, the number of people opting for individual voluntary arrangements (IVAs) will double as more people look to wipe out some of the debt that they owe. By signing up to an IVA, those in debt can often write off 75% of what they owe and avoid the daunting prospect of bankruptcy. An IVA works by setting a fixed amount that must be paid on a monthly basis, and in retu

leading debt management has predicted that over the next few years, the number of people opting for individual voluntary arrangements (IVAs) will double as more people look to wipe out some of the debt that they owe. By signing up to an IVA, those in debt can often write off 75% of what they owe and avoid the daunting prospect of bankruptcy. An IVA works by setting a fixed amount that must be paid on a monthly basis, and in return a portion of one’s debt is wiped out.

However, many banks are upset with the way that companies involved in setting up IVAs are promoting their services, as banks assert that IVAs are not “an easy way out of debt.” Over the past few years, the number of IVAs has grown dramatically. In 1998 there were fewer than 5,000 IVA agreements take out; however in 2005 the total topped 20,000 and the accountants KPMG say that about 45,000 people started an IVA in 2006. It is expected that by 2009, the number of IVAs reached will exceed 100,000 a year.

Research is showing that people who are as young as 21 years old have debts that are 3 times their annual incomes with overspending and education expenses. “The average IVA debtor owes ?52,000 but is seeking to repay only 39% of this sum, said Steve Treharne, head of personal insolvency at KPMG. He believes that last year alone, more than 3,000 people entered into an IVA with debts in excess of ?100,000.” IVAs were over introduced 21 years ago to allow “failed” startups with a less drastic alternative to bankruptcy”; however, they began to be used on a widescale personal basis after 2000.

But, said Mr Treharne, "the sorts of debts we have seen being dealt with by IVAs in 2006 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 items such as holidays) rather than to acquire assets or to fund a business. Given so many people with enormous debts, and the high average level, too many people have debts that they have no realistic hope of repaying." With all those in debt, debt consulting has become a very profitable business. I