Debt management company benefits from booming sector

Debt management company Debt Free Direct saw its turnover leap this year as companies reaped the rewards of a boom in Individual Voluntary Agreements (IVA).

The company’s turnover surged by 101% for a six-month period compared with the same time frame in 2005.

Debt Free Direct, which specialises in resolving credit card debt, announced that profits would be 'significantly more than double’ the amount it made in 2005.

Accuma, another player in the sector, has already celebrated a 250% increase in turnover, and reported a ten-fold rise in profits.

Both businesses focus on the drafting of IVA’s between financial institutions and debt-laden clients. The agreements have generated controversy because interest is frozen on outstanding debts once the IVA has been agreed.

Additionally, debt-management companies broker a deal that can see debtors paying as little as 25% of their original debt.

Research compiled by the Insolvency Service shows record numbers of people are filing for bankruptcy.

Related links:

Insolvency exchange’ to be launched 

R3 backs call for debt management regulation

The great debt let-off