Debt Problems After Reduction in Income

Client: RH
Employed: HGV Driver
Amount of debt prior to IVA: £16,000
Monthly payment into IVA: £70
Number of Creditors: 6
Original debt solution: Debt Management
Amount of debt reduction if IVA completes estimated at 84%
Debts: Credit cards and loans
Service offered: IVA

The client used credit for general household and family items such as furniture, electrical appliances and clothing as well as to fund household repairs and maintenance whenever required.  At this time he had a well-paid job and had no difficulties maintaining monthly credit repayments. Approximately 6 years ago the client lost his job and although he managed to secure alternative employment, monthly income decreased significantly.  He therefore relied on credit to supplement the reduced income and maintain existing credit repayments.

Of course with the existing credit, taking out new credit made matters difficult to manage. In addition there was the reduced income so less available to meet monthly commitments. It was a situation which soom spiralled out of control. Following a period on Debt Management the client felt an IVA was a more appropriate solution. He came to X-debt for IVA Advice and subsequently entered in to an Individual Voluntary Arrangement.

Monthly payments are now at a more affordable level and there is an end date to the arrangement when over 80% of the debt included in the IVA would be legally written off.

It is all too easy to fall in to the same trap as this client. Taking out credit when you have a good, well paid job only to lose your job or suffer reduced hours and income. These debts then become unmanageable. Seeking advice in such circumstances is nothing to be ashamed of and it can happen to any one of us.

Pick up the phone now to speak to an expert on 0800 043 2424 or 0161 787 3400. Alternatively you can get an indication of whether an IVA may be suitable for your needs by completing our IVA Calculator form.