More than half of Britons would consider taking out an Individual Voluntary Arrangement (IVA) if they were in serious debt.

Four out of 10 people said they would only consider an IVA as a last resort, but 11% said they thought the arrangements were perfectly acceptable, according to price comparison website moneysupermarket.com.

At the same time, 9% said they thought IVAs helped alleviate debt and should be made more widely available, and 17% said they were a good alternative to being made bankrupt.

But worryingly, 49% of people admitted they did not really know what an IVA was.

An IVA is a form of insolvency, in which lenders agree to freeze interest payments on debts in return for a set amount being repaid each month for a term of around five years.

Recent Government figures showed there was a 35% jump in the number of people taking out an IVA in England and Wales during the second quarter of the year, compared with the previous three months.

Tim Moss, head of debt at moneysupermarket.com, said: "For people suffering from spiralling debts, an IVA might seem like an ideal escape route.

"However, an IVA is not something that should be entered into lightly and without considered thought.

"It is a serious financial agreement with creditors that will typically last five years. Once entered into, it will make obtaining any forms of credit, even for such everyday items as a mobile phone contract, almost impossible."


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