Debtmatters, a company specialising in debt advice has recorded an increase in IVAs of 155% since last year. This alarming growth in consumer debt looks set to continue on its upward path. This month the number of IVAs carried out by Debrmatters was 29% up on February.

In January we reported that debt had risen over the Christmas period (see story in Knowledgebase). It would appear now that the chickens are coming home to roost.

For many people IVA is a last resort but it is the only way out to sort out their finance. They must agree to pay out a fixed affordable amount every month for a fixed period, typically five years. They will also lose their credit cards and the ability to re-apply. Creditors will often suffer the cost of the IVA consultant's fee but the alternative is to relinquish the debt.

The only real winners are the IVA consultants. There are a handful of specialist operators in the UK at the moment and they are all showing very healthy profits.

With UK consumers' debt at £1,100bn, of which £56bn is high interest credit card debt, the nation really needs to see a reduction in interest rates as soon as possible.