Debt consolidators condemned by ICAS

News Article - 08 November 2006
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The Institute of Chartered Accountants of Scotland (ICAS) has blasted debt consolidators after figures from the Insolvency Service showed a 55 per cent increase in personal bankruptcies.

The statistics also found that the number of people in England and Wales taking out individual voluntary arrangements (IVAs) had risen by 118 per cent. In Scotland, insolvencies have increased by nearly 20 per cent, ICAS states.

Anne Bryce, ICAS insolvency director, said: "The rise in debt on both sides of the border is becoming a depressingly familiar story.

"Quite simply, in England and Wales debt consolidators are allowed to aggressively advertise and market debt relief products, in particular, the IVA, even when that may not suit the circumstances of the individual debtor."

Ms Bryce said that people were being "bombarded" with television adverts urging them to consolidate their payments, but advised those in debt to take the advertising "with a pinch of salt".

She went on to urge debtors to seek out licensed insolvency practitioners whose services are often free.

Government statistics show that in 2004, there were 12,192 corporate insolvencies, 4,584 of which were compulsory liquidations while 7,608 were creditors' voluntary liquidations.

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