en-us http://backend.userland.com/rss Your Friends @ Myvesta.org.uk (stever@myvesta.org) myvestaukblog_archive.html stever@myvesta.org 115300103377345916 Two million UK individuals are fighting to keep their financial situation afloat, a debt management organisation has asserted.

DFD which advises borrowers on how to regain control of their finances, said its share of the market is growing at a yearly rate of 140 per cent.

The company is one of many making large profits by providing Individual Voluntary Arrangements (IVA) , in which borrowers get breathing space to reorganise and repay their debts. Its warning coincided with figures from the British Bankers' Association (BBA) showing an unexpectedly large jump in mortgage lending in May.

Banks approved 81,298 mortgages for house purchases last month, 20pc more than last year. Debt Free Direct's chief executive, Andrew Redmond, said various studies put the number of over-indebted people between 1m and 3m.

People are considered over-indebted when they can only afford the interest on their loans but cannot pay off the principal amount. Extrapolating from the first quarter of 2006, there will be 30,588 IVA cases across the market this year compared to 20,292 in 2005.

The BBA said that, facing high repayments, consumers' appetite for fresh credit card debt appears to be waning.

The amount customers repaid to credit card companies was greater than the amount they spent on plastic in May, meaning that card debt levels dropped by £251m. But unsecured debt, which includes loans and overdrafts as well as credit cards, rose by £699m.

Net mortgage lending, which strips out redemptions and repayments, was £5.73bn, the highest level for two years



The Telegraph