Despite wide spread optimism; consumer debt was still “on the up” for the latter part of Q2 2007.

Details from a new report indicates that the combined effects of interest rates and the increased cost of living is pushing people further into the red. The suggestion is visualised through the amount of people entering into IVA agreements and attending Bankruptcy hearings, which has topped the 35 thousand mark. Bankruptcies have rose by almost 11% during the period and IVA’s have increased by a staggering 50%.

Analysts suggest that an increase in the IVA procedure is almost certainly due to increased consumer awareness of the procedure. Although the IVA has been around for the best part of 20 years, very few people (if any) we’re familiar with the term, let alone understood its usage. As a result of increased commercial presence from organisations specialising in the procedure, the IVA has become more visual through widespread promotion.

However, the IVA itself is not the cause of increased consumer debt but its presence does supply a more accurate indication, to the severity of the problem. The fact that more and more people are choosing insolvency as a means to cope with their debt problems suggests that more and more people are allowing their debts to spiral out of control.

A large amount of people have borrowed themselves into very sensitive situations and shifts in the economy, like the ones we are witnessing at the moment, brings such people and ultimately the reality of the problem to the forefront of society.