16 November 2006
Global information solutions expert Experian has voiced its concerns over the rising insolvencies in Britain and is urging consumers to analyse all available information before making a decision on any loan or credit agreement.
A sharp rise in the number of individual voluntary arrangements (IVAs) being taken out by consumers with debt problems has been highlighted in a recent conference spearheaded by Experian.
IVAs are often seen as an option for consumers who are struggling with their debts and are seen as an alternative to bankruptcy. Other options include a debt consolidation loan or a personal loan, if these are at all financially possible.
Managing director of Experian, Richard Fiddis, warned: "There is evidence that consumers are being encouraged into IVAs without fully understanding the long-term consequences." He added that there was also a growing trend for women to opt for the debt solving arrangements.
In Mr Fiddis' view, consumers who were tempted into taking out an IVA "tend to be the least financially sophisticated" and are wrongly told that an IVA will not appear on their credit report.
"What they don't realise is that the IVA will appear on their credit report for six years and that it is just as likely that they will struggle to get credit in the future as if they had opted for bankruptcy," he added.
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