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Ivas To Outstrip Bankrupts

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http://www.thisismoney.co.uk/credit-and-lo...0&in_page_id=62

IVAs to outstrip bankrupts

Michael Clarke, This is Money

12 June 2006

A CONSUMER is entering into an Individual Voluntary Agreement – a less severe form of bankruptcy – every seven minutes as the UK's debt problems mount.

A study from accountancy giant PricewaterhouseCoopers found that people applying for IVAs have simply spent too much money rather than being hit by life-changing events, such as business failure or divorce.

The company said personal IVAs could soon outstrip the number of people applying for bankruptcy as more and more young consumers try to find a way out of their debt problems.

Report author, PwC partner Pat Boydon, said: 'People are simply spending too much. Expenditure in excess of income, with 83% of those surveyed giving it as a reason, is the principle cause of failure, not loss of income or occupation, or marital breakdown.'

According to the survey, 90% of IVA applicants are consumers, while growing numbers of individuals are also applying for bankruptcy. During the 1990s, three quarters of bankrupts were traders, but that has fallen to around 25% today.

Boydon added that the profile of a typical debtor is changing. Somebody applying for an IVA is likely to be in their twenties or thirties with credit card and personal loan debt in excess of £40,000. 'That person is likely to be unskilled, earning less than £30,000 a year and living in rented accommodation.'

Somebody applying for an IVA is likely to be in their twenties or thirties with credit card and personal loan debt in excess of £40,000.

i.e. STUDENTS

Edited by AvidFan

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Am I right in thinking you can go out and buy a porsche, say you can't pay it back, then they wipe 70% of the debt off? So a new porsche at 70% discount essentially? Or would you have to hand it back?

Edited by simon99

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Guest Charlie The Tramp

IVAs are being pushed by Insolvency Practioners where they believe the debtor could pay back a proportion of their debt. It`s window dressing as an estimated 160k bankrupts this year is not good news for the Government or the lenders. I wonder how many of these IVAs will eventually lead to bankruptcy for these people.

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Boydon added that the profile of a typical debtor is changing. Somebody applying for an IVA is likely to be in their twenties or thirties with credit card and personal loan debt in excess of £40,000. 'That person is likely to be unskilled, earning less than £30,000 a year and living in rented accommodation.'

Just goes to show, there's no such thing as a good tenant.

:D

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Am I right in thinking you can go out and buy a porsche, say you can't pay it back, then they wipe 70% of the debt off? So a new porsche at 70% discount essentially? Or would you have to hand it back?

As I understand IVAs they are designed to be a stop gap to give an opportunity to repay the whole debt. The debtor pays an affordable %age of the debt with interest frozen while trying to either get the means from elsewhere or sells all assets for the highest price, the aim being the debtor realises the assets to their best potential instead of the banks grabbing them & flogging them off quickly leaving the debtor still with large repayable debts.

Prolong the agony basically, the end result still in all likelihood will be bankruptcy.

It's not even a second chance, just a look at the mess you are in, at least do the decent thing & have a go at getting out of it!

I guess in a high number of cases IVA = bankruptcy.

I also assume the more unscrupulous will take the opportunity to feather another nest still leaving maximum damage behind as I believe no matter how large the bankruptcy order the time limits are standard.

Still leaves the genuine borrowers/savers to pick up the expense, & lawyers to prosper.

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Guest Charlie The Tramp

I believe no matter how large the bankruptcy order the time limits are standard.

If, during his/her enquiries into your affairs, the Official Receiver decides that you have been

dishonest either before or during the bankruptcy or that you are otherwise to blame for your

position, he/she may apply to the court for a bankruptcy restrictions order. The court may make

an order against you for between 2 and 15 years and this order will mean that you continue to be

subject to the restrictions of bankruptcy which are described in section 8.

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A whole generation unable to start a business until they are 40, more specifically those that are most likely to innovate.

Cool, more entrepreneurial market share for me ducky!

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A whole generation unable to start a business until they are 40, more specifically those that are most likely to innovate.

Cool, more entrepreneurial market share for me ducky!

I don't think you or others will fill the gap. This is another very ominous consequence of current economic policy. What will be left after this round of UK company sell-offs, offshoring and wastage. Possibly not a lot that gets foreign earnings.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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