Alternatives to Bankruptcy Offer Options
Personal insolvency is expected to increase this year, noted James Falla, Director of advice service Thomas Charles, while speaking of the predicted rise in the number of people struggling with bankruptcy in 2008.
Although “everyone’s talking” about the rising number of people facing debt problems, Mr. Falla acknowledged that the actual numbers of declared bankruptcies are difficult to measure. A forecast by KPMG predicts a 30% rise in the number of personal insolvencies this year; however the type of insolvency can vary.
Consumers facing personal insolvency are not always forced into bankruptcy. Many can enter into Individual Voluntary Arrangements (IVA’s) or informal debt management plans, Mr. Falla added.
The Director also noted that the exact number of IVA’s between consumers and lenders can be measured easily, but there is no way of calculating the exact number of other debt management plans that will be arranged this year.
Debt consolidation loans are recommended as an effective answer to insolvency for many people this year, suggests the price comparison website uSwitch.com. By lowering interest payments, a debt consolidation loan can be the answer for people looking to eliminate their debts and avoid outright bankruptcy.