Debt Free Direct profit explosion raises Iva anxiety

Insolvency advisor Debt Free Direct has highlighted the ongoing burden of debt in the UK with a prediction that it will beat profit forecasts by more than ten per cent this year.

The company, which arranges individual voluntary arrangements (Ivas) and helps restructure debt payments was already tipped to make almost £10 million in profit.

The number of IVAs arranged by Debt Free Direct rocketed to 551 between May and July, up 196 per cent on the same period of 2005, before rising to 607 in August.

The company charges the banks and credit card companies seeking to recoup their lending more than £1,000 for each Iva they arrange.

The Insolvency Practitioners Association has asked the government to investigate the sale and regulation of Ivas due to concerns that they may be poorly marketed.

Some advertising suggests that borrowers may be able to escape up to three-quarters of their debt with an Iva. More normally it is between a third and one half.

Debt Free Direct, which controls 20 per cent of the Iva market, said that it welcomed an investigation as its practices were fully compliant with industry.

© Adfero Ltd

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