However, with consumer debts increasing at average annual rates of almost 15 per cent since 1997, accountants and other financial specialists have seen the chance to break free from their traditional partnerships and set up their own outfits to offer advice to this growing crowd of heavily indebted individuals.

One of those to have taken the plunge is 39-year-old Charles Howson. A marketing executive, Howson had a spell working for a global management consultant focusing on cost containment, before joining the board of Baines & Ernst, one of the UK’s largest debt management companies in March 2001. Soon afterwards, at the age of 34, he became chief executive.

During a tricky period for the company, with regulatory changes in the sector, Howson managed to improve profitability in his year and a half at the helm. Ten months after leaving Baines & Ernst in October 2002, he acquired licensed insolvency practitioner Chambers Consultants, investing £150,000 of his own money, to take advantage of the continuing strong growth in the area.

Howson saw an opportunity to acquire a business that was already operating. This would be quicker than setting up an outfit from scratch. At the time the group only had four employees, a turnover of £200,000 and just 44 insolvency cases. He also used the DTI’s small loan scheme to gain extra capital to assist the early stages of growth, lending the group an initial £143,000 to kick-start the business.

By this stage another fledgling debt adviser was making great strides after a successful flotation on AIM. Debt Free Direct, set up by insolvency partners of accountancy firm Lathams, was breaking into profitability and experiencing rapid growth. This showed Howson the direction to pursue if he was to make the most of this burgeoning area.

Howson changed his business’ name to Accuma – ‘because we do not want to focus on debt alone, but expand into other financial services’ – recruited some of his former colleagues at Baines & Ernst and started to position the company for its own flotation on AIM. This occurred in March, when the group raised £3.7 million net. This injection of capital has helped the group’s expansion no end.

Accuma and its competitors focus on organising Individual Voluntary Arrangements (IVAs), which allow debtors to agree to pay a fixed amount monthly over a certain number of years, normally five. After this period all debts will be cleared, a process that allows individuals to avoid bankruptcy. Creditors appreciate this tool also, as they are assured of receiving a greater proportion of these debts than under a bankruptcy.

IVAs have increased in popularity over the past year. Recent figures from the DTI said total insolvencies rose 36.8 per cent in the second quarter, compared with the same period a year ago, but numbers of IVAs jumped nearly 70 per cent.

Accuma is growing even more rapidly. During the quarter leading up to flotation the number of IVAs completed stood at 46 per month. Since then, this has picked up to 86 in May, 106 in June and roughly 160 in July. Future contracted revenues now stand at £4.7 million.

Howson has 70 staff and says the business has enough capacity to handle 320 cases per month. Accuma’s shares have doubled since flotation and Howson’s 47.8 per cent stake is worth nearly £16 million. With strong growth forecast in a market where consumers owe over £185 billion on credit and store cards, personal loans and overdrafts, his risk with insolvency appears to have paid off.

See also: Company voluntary arrangements – what you need to know