Insolvency cases for loan and credit borrowers may rise in 2008
A rise in the number of individuals who are struggling to manage personal loan repayments and mortgage commitments, coupled with newly introduced legislation, is set to fuel an increase in the number of newly identified insolvency cases throughout the course of 2008.
One of the UK’s largest debt management providers has revealed that inter industry changes for the insolvency sector, which includes newly agreed banking industry legislation, will allow more people seeking relief through insolvency or IVA’s grace for their requests to be passed.
Accordingly, more than 2 in every 5 new IVA cases had been rejected in the run up to December 2007, due to an unwillingness by the lending industry to allow such requests to pass. However, recent negotiations may have partially lifted certain restrictions, meaning that more people, who are seeking help through insolvency or more specifically an IVA, will have their application granted.
Industry stats sourced from an independent party show that newly granted IVA cases dropped by more than 30% in Q4 2007. Analysts have suggested that an increase in proposal rejections by creditors were the most likely cause of the decline, and not a stabilisation in consumer debt as some had first hoped.
