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.