Debt laden mortgage-payers thrown lifeline
Article Category: IVA (Individual Voluntary Arrangement)Help and Advice
Yesterday’s interest rate cut may have thrown debt-laden mortgage-payers a lifeline, according to a money advice charity.
The National Debtline service said that passing on the Bank of England’s (BOE) reduction of 0.25 per cent would help borrowers, especially those coming to the end of fixed-rate deals.
Spokesperson Beccy Bolden Wilks commented that there were fears lenders, dealing with the credit crunch and tightening of lending criteria, may not extend cheaper borrowing on to their clients, thereby increasing the spectre of insolvency for them.
Ms Bolden Wilks said: "Refinancing is one option if you are getting into financial difficulty; and if you’ve got a good credit rating, [ask yourself] can you manage your debt cheaper?
"If that isn’t an option for people anymore, then it could be that we’ll see more people needing debt advice on the other options – which may include insolvency: IVAs or bankruptcy."
She did sound a positive note though by saying that although levels of insolvency had been going up slowly at the end of this year, "over the last couple of years it’s coming down overall".
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