Some debt management companies have noted a 67% increase in enquiries regarding IVA applications in comparison to figures for December 2007.

This rise has been perpetuated by a lethal cocktail of utility bills, credit card debt and unsecured personal loans. For many consumers, January was the most difficult month of the year to cope with debt after the rush of the Christmas hype and the cold, harsh realities of over-spending which became apparent on statements and demands. Higher mortgage repayments are also adding insult to injury and consumers are watching more money go out to creditors and being left with less money to survive on.

January set the trend for IVA enquiries as people did not want to drag a mountain of debt behind them into the New Year.

It has been estimated that the number of people becoming insolvent in 2008 is likely to be even higher than last year with figures reaching the 110,000 mark.

It has also been predicted that people will seek IVA help to alleviate debt which has escalated to at least £50,000.

During 2008, people will weigh up the odds between taking out an IVA and opting for bankruptcy. An IVA may be the favoured choice as it does not have such a damaging affect on an individual’s credit rating. However, bankruptcy is a quicker way to release that ball and chain of debt. Many will argue that whilst they are waiting for an IVA to reach completion, those who have opted for bankruptcy have started to rebuild their Credit History and gain a fresh, new status without the shadow of previous debt hanging over their heads.