The rise in U.K. bankruptcies and Individual Voluntary Arrangements (IVAs) have a major impact on credit card portfolio trusts because they are typically fast-tracked through to charge-offs. This would have a more immediate impact on U.K. securitization master trusts.

Fitch Ratings believes that the recent increases in bankruptcies and IVAs have been strongly influenced by the change in law that happened in April 2004, facilitating the process of declaring individual bankruptcy. IVAs were established in 1986 as a means for consumers to formally reschedule debts without declaring bankruptcy, subject to consent by at least 75% of creditors.

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