The Lancashire Evening Post came up with an interesting figure. Quoting from an interview with the head of personal insolvency at KPMG, they say that the average debtor taking out an IVA owes an average of £52,000 while the Insolvency Service estimates the average bankrupt has debts of nearer £46,587.
This seems to be counter-intuitive because we would have expected bankrupts to go down with more debts than people trying to repay at least some proportion of their debt through an IVA.
However, as the differences between the two sums are not significant and given that the numbers for IVAs are now pushing towards those for personal bankruptcies, this seems to support the view that choices between IVAs and bankruptcy are based on something more than straightforward financial factors.
Aggressive advertising and marketing by the IVA factories must now be a more significant factor in the huge surge in the numbers of people taking up IVAs - up 81.9% in the last quarter of 2006 - and it's tempting to ask if all those debtors who were sold IVAs would otherwise have opted for bankruptcy - or would they have simply struggled and carried on servicing their debts ?
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