How an IVA can help you and your family
An IVA is a flexible debt solution that can help you and your family become debt free within a set period of time. Below you will find real life examples of people we’ve helped get out of debt.
Families with joint debt
We helped a family who owed over £60,000 on unsecured loans, credit cards and store cards. The husband was a government worker and his wife worked part-time in a local supermarket. They owned their own home and had two young children.
After taking into account both their wages and deducting their living costs, they could afford a reduced monthly payment of £300 towards their unsecured debts.
As IVAs are individual, we needed to set up one IVA for the husband and one IVA for his wife. Their overall monthly payment was split between each IVA.
When they finished their IVAs, unsecured creditors had written off £42,000 and reduced their monthly unsecured debt payments by more than £1000.The IVAs protected their home, made them they became debt-free within five years and gave them peace of mind, as it stopped contact from those creditors.
Options for pensioners
We helped a couple who were both pensioners who owed over £30,000 on unsecured loans and credit cards.
They had recently retired, and had therefore suffered a reduction in income. They owned their own home which they were anxious to protect. After their living costs were taken into account, they could afford to make a monthly payment of £200 to their debts.
We helped them both to set up an IVA, which allowed them to each make an affordable payment every month, for five years. As they owned a property, creditors asked them to obtain a valuation of their property, in month 54 of the 60-month IVA. As their mortgage was less than 85% of the value of their property, they had to attempt to re-mortgage to release the equity in their property, and therefore improve the amount their unsecured creditors received.
However, due to their age, they were unable to re-mortgage. They extended their IVAs by 12 payments to compensate their creditors for being unable to re-mortgage. Their home was never at risk of being sold.
Their IVAs finished in 6 years, creditors agreed to write off £15,000 of their unsecured debt and reduced their monthly debt payments by more than £600.
A foster carer
We helped a client who was a foster carer who owed £25,000 mainly on credit cards. She fostered between one and three children at any one time and was worried about being made bankrupt as this would have prevented her from being a foster carer.
We firstly assisted her with compiling a 12-month cash flow for their business, as the income was dependent on how many children she was fostering at any one time. We achieved this by meeting in person to examine her bank statements and proof of fostering income.
After the client’s business expenditure and personal living costs were taken into account, she could afford to make an average monthly payment of £220 to her debts. However, as her income was dependent upon the number of children she was fostering, she was not able to pay £220 every month to her IVA, but instead creditors agreed for to contribute an average of £220 a month during the IVA.
The IVA was approved by the creditors, which allowed the client to pay her debts off in five years. Creditors agreed to write off £12,000 of her unsecured debt and reduced her monthly debt payments by more than £600.
In receipt of benefits
We helped a disabled client whose income was mainly made up of disability benefits. He owed £30,000 from credit he had taken out when he was able to work. The client lived with his parents, who were fully aware of the client’s situation. After his living costs were taken into account, he could afford to make a monthly payment of £100 to his debts.
We discussed the options with him which he considered very carefully and discussed with his parents. He wanted to avoid bankruptcy, on moral grounds. His parents agreed to help him make the £100 monthly payment to his IVA, if he ever felt he couldn’t afford it. Creditors agreed to write off £24,000 of his unsecured debt and reduced his monthly debt payments by more than £500.
Change in circumstances
We helped a factory worker set up a Debt Management Plan (DMP) who owed £10,000, mainly on credit cards. After his living costs were taken into account, he could afford to make a monthly payment of £200 to his debts.
He originally preferred a DMP as he felt he could pay his debts back in full. However, a year into the DMP, his overtime was stopped which reduced the amount he could afford to pay his debts. This reduced his affordable monthly payment to £100, and consequently, it would take twice as long to pay his debts back in a DMP.
As soon as we were aware of this, we reviewed the client’s debt solution options with them. The client decided to proceed with an IVA, which would result in their debts being repaid in five years.
Creditors agreed to write off £4,000 of their unsecured debt.