Insolvency levels rise again

MONDAY, SEPTEMBER 25, 2006

Once again, the numbers of people in the UK claiming insolvency has risen.

An insolvency advisor has predicted record profits this year, fuelling concerns that insolvency levels are soaring to uncontrollable levels.

According to Debt Free Direct, which advises customers on insolvency agreements and debt restructuring, its profits will beat expectations by a staggering ten per cent.

The company is paid by the banks and building societies for assisting them to recoup at least some of the debt when a debtor reports insolvency.

The number of individual voluntary arrangements (IVA) arranged by Debt Free Direct increased by 196 per cent during May to July, as compared to the same period a year earlier.

A request has been submitted to the government by the Insolvency Practitioners Association for an investigation into the marketing of IVAs, amid concerns that borrowers are being misled into believing they can escape more debt than is realistic.

Debt Free Direct currently controls 20 per cent of the IVA market.