Over the next three years, house prices, the cost of borrowing, inflation, and the cost of living are all expected to go up. But some people are finding that their wages don't keep up with these changes and are falling deeper and deeper into debt, which eventually leads to an IVA (IVA).
Figures show that the number of IVAs will triple from now until 2010, when it will go over the 50,000 mark.
Still, it's ironic that there are people who can't go bankrupt because they can't afford it. A member of the CAB said this about the GBP500 fee to go bankrupt: "We're seeing a lot of people who need to go bankrupt but can't afford to do so. The fee is too much for them."
Others with IVAs may have run into trouble with the law, which says that any equity in property or possessions must be given to creditors. They may have found that the assets they thought they were saving for the future were quickly disappearing.
But there are mortgage brokers who help people who are having trouble paying their bills get home loans or remortgages, so they don't have to get an IVA. By agreeing on a rate of repayment that works for them, consumers can put the "idle" equity in their homes to work for them financially.
Once an affordable plan has been set up, a remortgage can give people who thought they were going to go bankrupt the chance to use the money in their homes to pay off their debts.
With the average growth of property being 10 percent per year, there may be more money available for a remortgage than was thought in the beginning.
This, again, can work in favour of the consumer who may not only be able to manage their debts and financial future, but also to effect a positive rating on their financial history.
