UK debt levels 'far worse than figures suggest'
UK debt levels 'far worse than figures suggest'
Friday 26th September 2008
According to data from the Insolvency Service, over the first half of this year around 80,000 Britons took out an Individual Voluntary Arrangement (IVA) to help them manage their debt.
However, the body does not monitor those who those who have taken out debt management plans (DMPs).
R3, which represents insolvency professionals, claims that this figure is as high as 600,000 and said that the failure to take these consumers into account means that the true extent of the nation's debt problem is being masked.
Nick O'Reilly, president of R3, said: "A DMP is an informal alternative to an IVA or bankruptcy which works to clear someone's personal debt without the formal implications of the official arrangements.
"This can be a good option for individuals who have manageable levels of debt. However, there is cause for concern that these informal arrangements have the potential to turn into a 'life sentence'."
Consumers considering a DMP or IVA are urged to approach a debt management company for specialist debt advice.
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