At first glance it seemed like a cause to celebrate. Debt management companies DFD and Accuma have both issued profit warnings.
One would assume that if debt management companies are struggling, less of us are in debt, ergo the biggest threat to continued economic growth has gone away.
Alas, on this occasion, the good news, having rested for a while before the mirror, has disappeared like smoke up the chimney behind.
Apparently, it’s not so much that less of us are in debt; it has more to do with banks being more stringent.
As you may know, these days IVAs are becoming popular, as a softer alternative to bankruptcy. These are arrangements in which the sum owed can be reduced, but at least the lender gets some money back.
But, according to DFD, banks have become more reluctant to agree Individual Voluntary Arrangements (IVAs), presumably meaning bankruptcy rates will rise.
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