SINGLE NURSE - client has been living with her
partner for three years. She is the main bread winner as her partner has been
unemployed. She has borrowed money to help pay debts which her partner owed to
various people including the Inland Revenue. She has also used credit cards to
supplement their income, robbing Peter to pay Paul. Her personal unsecured
debt has risen to over £50,000 including 2 unsecured loans and 5 credit cards
with repayments of over £900/mth
Client’s problem came to a head when the hospital changed
the agency it worked with and she was forced to take a reduced hourly rate.
She therefore lost up to £500-£600/mth take home income and could no longer
make the monthly repayments to her creditors.
After analysis of her case, Thomas Charles confirmed that the
client could afford to repay a maximum of £400/mth towards her debt. She is
living in rented accommodation with her partner and therefore can not raise
additional money from a mortgage. An IVA based on payments of £400/mth for 60
months was agreed with creditors. Creditors will freeze all further interest
and charges and accept a share of the total £24,000 after which any remaining
debt will be written off.
RECENT GRADUATE
- client was studying a 4 year
degree course in Computer Science. During the holiday periods, he worked as a
Web Site designer for a local software firm for which he was paid up to £1500/mth.
He felt this income was safe. His employer told him that there would always be
work in the holiday periods if he wanted it and there would be a permanent job
after graduation. On the back of this expectation, the client funded a car on
HP and various credit cards.
Unfortunately, in February 02 (the year of his graduation),
the employer hit hard times and was no longer able to offer employment after
graduation. This left the client with credit card and HP debt which he was
unable to repay. At first, he felt that it would not be a problem to find
alternative employment. He therefore took an additional unsecured loan to
cover the credit repayments until he completed his course. By the summer of
2002, he had c£38,000 of personal debt requiring monthly repayments of £550.
After graduation, the client found it difficult to find
work. He eventually secured full time employment in Jan 03. However, this was
at a lower salary than he was expecting. By this time, his debt problem was
spiralling out of control as he tried to maintain payments by taking cash from
one card to pay another (robbing Peter to pay Paul). Thomas Charles confirmed that
the client could afford to pay £300/mth into an IVA with his creditors. This
has now been agreed with them giving him the opportunity to get back on his
feet and concentrate on improving his employment prospects rather than just
worrying about debt.
POLICE OFFICER - client has worked for the police
force for 15 years. He is married with two dependant teenage children and
lives in police accommodation. His wife has always worked part time. Client
was used to supplementing the household income with credit cards. He had also
taken a personal loan to carry out home improvement.
In the summer of 2001, client decided to try and get his
borrowing under control and took an additional £15,000 consolidation loan.
However, as often happens, different household expenses came up and the
balances on credit cards started to creep up once again. He now had two loans
and card payments to keep up totalling debts of c£45,000. Making the payments
was a struggle, but with extra overtime, it was manageable.
In September 2002, client became ill and although able to
keep working, was advised that he should not carry out further overtime. He
realised that he would no longer be able to maintain his debt repayments. He
therefore approached a Debt Management Company who proposed an Informal Debt
Management programme reducing his monthly payments down to a manageable £500/mth.
He maintained these payments for 6 months paying £3000 back to his creditors.
However, by March 03, he realised that the interest and late payment charges
on his cards had not been frozen. In fact despite his payments, his total
outstanding balance has actually increased! He realised that if he continued
with this course of action, he would never repay his debt.
Thomas Charles has been able to introduce the client to the IVA
solution. He has been able to offer his creditors a settlement of £30,000
payable over 5 years at £500/mth. The protection of the IVA means that
interest and charges are now frozen and a real solution with fixed end date is
in place. As important, although formal and legally binding, the IVA solution
is a private agreement so future career prospects within the police force are
not effected.
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