Debt management companies saw their shares plunge yesterday after a leading player warned that the market had become tougher, particularly for individual voluntary arrangements that allow people to restructure their debts to avoid bankruptcy.
Debtmatters saw a 73% share price drop after announcing a scale back because it believed it 'may no longer be able to deliver IVAs profitably'.
Firms affected included Accuma and Debts.co.uk whose shares dropped 23% while Debt free Direct went down by 29%, The Guardian reported.
Firms have recently come under fire for encouraging people with large debt to agree to an IVA instead of informal arrangments with creditors. But banks and credit card companies are now cutting back on the fees they are prepared to pay.
Further reading:
Debtmatters shares nosedive in IVA fears
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