"As many as one in five debt repayment plans are falling by the wayside, leaving thousands of Britons in danger of going bankrupt.
Many individuals who have taken out an individual voluntary arrangement (IVA) to reduce their debt have been unable to stick to the repayments and now have a lapsed plan that threatens to tip their finances over the edge.
If the IVA fails, the money spent on setting up the plan – which can be as much as £2,000 – then goes to the insolvency practitioner to meet their costs, leaving the borrower saddled with the original debt.
Malcolm Hurlston, chairman of the debt charity Consumer Credit Counselling Service (CCCS), says: "When IVAs fail, they impart a significant financial and human cost on the consumer, who will end up making payments to the IVA provider without getting relief from their debts."
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