After discussing his financial details with us, he decided to go for an IVA. His creditors agreed that he only need repay just over half of the total debt.
The interest was immediately frozen and he was able to pay a chunk off the agreed amount each month. It was still a struggle to make the payments, but with the debt going down all the time he could manage it, and there was always enough money left over to meet his important family needs.
It was agreed that Mr C is to pay £305 per month for 60 months - £18,300 in total. £13,000 will be written off and he will be debt free at the end of the agreement period, 60 months.
Mr V was made redundant three years ago when his employers went bust unexpectedly. He got no payment and was unemployed for seven months, causing him to borrow heavily on credit cards to replace missing income.
After this long period of being unemployed, he attempted to consolidate his debts with a loan from her bank. His credit card borrowing continued to escalate and his health suffered due to the financial burden. He found employment again and we could negotiate an IVA with his creditors and he now pays just £300 per month.
Debts of £34,000 will be wiped clear in five years, and Mr V can look forward to a debt and worry free future.
Mr and Mrs W have three children under 7, and a total debt of £43,000 spread over five credit cards, two loans and an overdraft. They have a car on hire purchase which is essential to travel to their needs.
They currently pay out £650 per month leaving a mounting overdraft. Their outgoings leave them with no money at the end of each month. They have agreed monthly repayments of £280 for 3 years, and £450 in years 4 & 5 after the car H.P. ends.
In total, Mr and Mrs W will pay back £20,800 over 60 months leaving them debt free.
Below are a couple examples of Debt Management cases, which we have handled in the past. Names have been changed to protect client privacy.
Mr S is a self-employed builder, he and his wife have three young children. They currently rent their home from a private landlord.
Although Mr S's business was doing well, he and his wife were experiencing the considerable financial pressure which comes with having children. As his wife was no longer working, they were feeling the loss of a second income.
Mr S has been using credit cards and overdraft for some time, but was beginning to rely on them more heavily and using it to pay their rent and other financial commitments. He was beginning to slip behind on his monthly payments.
We advised Mr S that a DMP would provide the best solution to his problem. Rather than nine separate payments of £690 per month, we could restructured his credit commitments to just one monthly payment of £310.
Mr S has more control over his finances and he no longer has pressure about missing any payments. Additionally, his interest was frozen by the credit companies, meaning that he could easily reduce his total indebtedness at a much quicker rate.
Mrs A is a secondary school teacher and owns a house with her husband worth £180,000, with £130,000 outstanding on their mortgage. Their credit commitments comprise of two unsecured loans, four credit and store cards and a bank overdraft. Their debts total around £30,000.
Although Mrs A had not fallen behind with making payments, she was finding it more and more difficult to manage. Her credit card balances were not decreasing as she could only afford to make minimum payments. She had been rejected for unsecured loans and was not keen to remortgage.
Mrs A contacted us, and on reviewing her finances we discovered that her total income was exceeded by her outgoings. She was committed to payments totaling in excess of £850 per month. We contacted her credit companies and negotiated a single monthly payment of £437, and in addition we were able to freeze interest with her creditors. As well as the lower payment, Mrs A found that her debts were reducing at a faster rate.
Mr P had worked as an IT consultant for many years. Due to unavoidable, he was made redundant and had to accept a job at a reduced salary.
Mr P soon discovered that he was unable to meet his creditors demands due to his changed circumstances. His disposable income was less than half of what he was being asked each month.
We were able to prove to Mr P's creditors that he was genuinely unable to fulfill his current financial commitments. We were able to negotiate reduced payments befitting of his new circumstances. Rather than paying £467 per month to different creditors, we organised one single payment of £183 per month. We managed to freeze interest on his unsecured debts.
Although it would take longer for him to clear all of his debts, Mr P was happy that the flexibility of his DMP would enable him to increase his monthly payments when he obtains a higher paid job in the future.