3m people ‘financially vulnerable’
Up to three million people are in so much debt that they could enter an individual voluntary arrangement (IVA) in the next few years, according to an expert.
Derek Oakley, insolvency director at Debt Free Direct, said that millions of people were financially vulnerable and would never be able to repay their debts.
He stated if these people experienced serious upheaval such as divorce or losing their job, many of them would seek help from specialists to manage their debts, possibly by entering into IVAs.
Earlier this month, Debt Free Direct released figures showing that the number of IVAs issued between May and October this year was twice that during the same period in 2005.
Mr Oakley said: "There is a large population of over-indebted people already who are able to pay their monthly repayments, just about.
"But they are in a position where they can never repay the actual debt that they have incurred, short of an inheritance or a lottery win."
Recent research from Datamonitor showed that British banks were owed £215 billion in unsecured debt last year, which makes up a third of all the consumer debt in western Europe.
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