Millions of young Britons see being in debt as a way of life, according to a report – and those considering an IVA who believe rising property prices and the equity in their home will provide a long-term solution to their problems are risking "financial suicide", according to its author.

The report found that "using credit to meet everyday expenditure was a way of life for many young adults, with the difference between needing something and merely wanting it often ‘virtually indistinguishable'."

IVA "no easy way out"

Personal insolvency – taking out an IVA or declaring bankruptcy – was not an "easy way out of debt", cautioned Anne Gunther, chief executive of the Standard Life Bank, which commissioned the report.

But she added that, "Pinning your hopes on housing equity … is financial suicide."

The chairman of the Consumer Credit Counselling Service (CCCS), a debt advice charity, agreed that owning a property was not a way to avoid taking out an IVA or bankruptcy.

Property no way to avoid IVA

"It's time to put an end to the old shibboleth that buying a house is always good for you," he said.

"A large proportion of the people who turn to us for help are those who have taken out mortgages which they cannot afford, leaving them highly vulnerable to interest rate volatility," he added.

Tackle debts for good with an IVA

Just as a high proportion of business insolvencies are caused by asset-rich companies simply not having enough cash to function, owning a property – while it may represent a significant chunk of wealth on paper – is not necessarily going to help someone with debt troubles avoid taking out an IVA.

In many cases, it may hide the problem, where taking out an IVA may allow the person to tackle their debts for once and for all.

Talk to Varden Nuttall about an IVA

Varden Nuttall has been established for more than 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an IVA. We employ 90 people, including trained and skilled IVA administrators, and are one of the largest IVA companies in the UK, where we handle more than three per cent of all individual voluntary arrangement applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.