Mortgage debt crisis feared

There has already been a rise in the number of Individual Voluntary Agreements (IVA) since 2006 and, as a result, banks are refusing to agree to them with more frequency. This is because under the agreement of an IVA, the debtor does not have to pay off the full amount of their debt. However, banks’ reluctance to enter these agreements is leaving a large proportion of insolvent consumers with a large amount of debt still to settle, even after the losses of their homes.

Sometimes, in their haste to recoup their losses, lenders are not attaining the market values for properties again saddling the insolvent parties with more debt and no visible means of paying it off.

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