They say bad news comes in threes so after a surprise base rate rise and the press awash with stories around the explosion in individual voluntary arrangements, what are we to expect next? Affordability crisis as personal debt soars, perhaps? The IVA story is a real problem not just in terms of consumers’ perception of debt but also its long-term effect on lending. The figures and predictions are stark. In 1998 there were less than 5,000 IVAs, in 2005 there were more than 20,000 and forecasts show they could be at 100,000 a year within a few years. This is having a significant effect on the unsecured lending market. Banks are beginning to ratchet up their bad debt provisions and this is starting to hurt. It has led to concern in some quarters about the IVA management firms that advertise on daytime television. Are they ambulance chasers or the providers of a valuable service? I’ll let you form your own opinion on that one. Remember that for an IVA to work, 75% of the creditors must agree. For home owners with equity there are many opportunities to deal with rising unsecured debt with secured loans, further advances and remortgages being the most obvious. This is made clear by the fact that the remortgage market remains strong. Mortgage arrears are rising. Figures from the Council of Mortgage Lenders show a rise in arrears, with an increase in the number of homes repossessed in the first half of this year. Some 8,140 properties are in possession, an increase on the 5,690 possessed in the second half of last year and the highest figure since the first half of 2001. The number of borrowers more than 12 months in arrears on their mortgages is also on the rise, to 15,070 from 14,380 in the second half of 2005. But there are fewer mortgages three to six months in arrears. The facts behind these figures are that repossessions are still low by historical standards. There does not seem to be a problem developing on the mortgage front. The mortgage market has proved itself to be flexible and one sourcing system lists over 60,000 products from more than 250 product providers. Those figures are proof of a vibrant, healthy and competitive market. And customers are the beneficiaries of these excellent products. Doom mongers will always seize opportunities for banner headlines regarding debt. Over time this will have a detrimental effect on consumers’ attitudes to debt. But statistics can be interpreted in many ways. Perhaps the level of IVAs reflects the credit market working in the proper way, and changes to the insolvency statutes may be having the desired effect.