- Friday, 15 January 2010IVA help may be required by the dramatic number of UK households who borrowed money from loan sharks to fund Christmas.
A new study commissioned by housing provider Circle Anglia found that more than 100,000 of the poorest families have entered 2010 crippled with a combined debt of around £82 million after borrowing from illegal lenders.
The report estimated that the value of the loans is around £29 million, but taking into account sky high interest rates averaging 825 per cent, people will end up having to repay a collective sum of around £82 million.
On average people borrowed nearly £300 to cover festive spending, with a typical repayment period of one year.
Chief executive of operations at Circle Anglia Andy Doyland said the figures were "very concerning" and demonstrated the increasing trend of illegal lending in the UK.
"We hope that by turning the spotlight on loan shark activity we can help more people to seek help and get sound financial advice," he added.
Last year prominent loan shark John Kiely was sentenced to five years in prison, after earning £2.9 million over a five-year period from charging poor families interest rates as high as 2,437 per cent.
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