It is too early to tell what the impact of the global credit crunch will be on the number of people seeking IVAs or declaring themselves insolvent, an industry expert has said.

James Ketchell, spokesperson for the Consumer Credit Counselling Service (CCCS), said that it took some time for consumer debt levels to build up to such a point that an IVA or insolvency became necessary.

As a result, he explained that it could take years for the full impact of the recent global financial turmoil to display itself.

He added: "There is a risk that people on cheap fixed-rate mortgages will in the future be forced onto more expensive products, so they will have to address their spending as a consequence of that.

"In general it is hard to tell how the credit crunch is going to affect people in this way but it is going to be more difficult for people in the future."

Recent figures from the Insolvency Service indicated that 10,239 people opted for an IVA in the third quarter of 2007, down 4.3 per cent on the previous three month period.

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