Debt Management Case Studies

Example are based on cases, typical of the many people we have helped. Some details and values have been changed to protect client privacy.

CSA payments make creditor repayments unaffordable.

Debt: £28,000 Was paying: £850/month
Now paying: £400/month
Client has an income £1480 per month, and was able to manage repayments on debts of £28,000 while living with his partner and child. The relationship broke down and the client was still able to afford repayments until CSA demanded over a 3rd of his income. Now unable to keep up with the repayments, debt management is the only option. An IVA is not possible as he has only 2 creditors. He is not a homeowner so can't get an unsecured consolidation loan for such a large amount.
Fees: Setup fee £800, monthly management fee £71.
Total fees payable* = 85 months * £71 = £5,993.

Remortgage not a option for Pensioner with debt of over £40K

Debt: £42,000 Was paying: £910/month
Now paying: £410/month
Client has debts of £42,000 with 8 creditors. He is over 65 years old with £1,270 per month joint income from his own and wife's pension. He was paying out £819 per month. He owns his home, without a mortgage, valued at over £400,000. He was refused a secured loan due to insufficient disposable income. We have reduced his payment to £420, with a view to getting a secured loan or downsizing his home in the future.
Fees: Setup fee £820, monthly management fee £72.
Total fees payable* = 124 months * £72 = £8,961.

Debt management the only solution for a period of umemployment

Debt: £12,950 Was paying: £350/month
Now paying: £180/month
This client had affordable credit repayments until her husband lost his job, halving the household income. Two months later their savings were running low so they decided to look for a consolidation loan to reduce monthly payments.
Soon they would start to miss payments and needed a solution. The client looked at an IVA but her husband would be returning to work and an IVA would be too permanent as their circumstances would be changing. Debt Management was the right solution for them because the payments were flexible and could be increased when they were both working again.
Fees: Setup fee £360, monthly management fee £35.
Total fees payable* = 89 months * £35 = £3,115.

IVA not a option due to unstable employment history.

Debt: £21,325 Was paying: £450/month
Now paying: £300/month
Client lost his job and was out of work for several months. He began living on credit and the debt grew to £21,325. The client started a new job, but must serve a 3 month probation period.
He has a value of debt that makes him eligible for an IVA. However, the fact that he had just started a new job and has recently had a period without work means this option is not currently available to him.
Creditors need to be confident that IVA payments will be made at the agreed rate each and every month for 5 years. A Debt Management programme is more flexible in this respect and suits this clients situation.
Fees: Setup fee £600, monthly management fee £53.
Total fees payable* = 86 months * £53 = £4,547.

Debts of £83,000 but not able to write off any with an IVA

Debt: £83,350 Was paying: £2300/month
Now paying: £980/month
Client takes home £3,750 a month and jointly owns a property with her husband. These factors have enabled her to build up of £88,350 of unsecured debts. Due to the high debt, Client contacted us about an IVA. On speaking to one of our advisors it was explained that working within the guidelines of an IVA she would be paying back the full amount to her creditors. (60months x disposable income + £20,000 remortgage = the original debt). The client was not aware of Debt Management and on finding out more decided this was the best option for her circumstances.
Fees: Setup fee £1,960, monthly management fee £100.
Total fees payable* = 95 months * £100 = £9,500.

Separation and pregancy make repayments unaffordable.

Debt: £19,139 Was paying: £534/month
Now paying: £200/month
Client had separated from her partner and then found out she was pregnant. She was working but was still in her probation period so was not entitled to full maternity pay. Due to the two large changes in her circumstances coupled with the increase of expense of being a single parent with a new born meant that her finances went out of control. She knows this can't continue and this is a realistic option for clearing her debts. A consolidation loan is not an option as she has nothing to secure it against and the debt is too large for an unsecured loan.
Fees: Setup fee £400, monthly management fee £35.
Total fees payable* = 116 months * £35 = £4,089.

Seperation leaves client to repay debts by himself.

Debt: £14,293 Was paying: £641/month
Now paying: £300/month
Client took credit while he was with his partner, and with both wages, they could maintain repayments. They have now separated and because the debts were taken out in just his name he has to make the repayments alone to 12 different creditors. Living just by himself, his living costs has also risen.
To help make ends meet, Client started a second weekend job, but is still struggling. The client wants to repay the debts but as things are cannot see an end in sight. On Debt Management his payments are affordable and his debts are reducing every month.
Fees: Setup fee £600, monthly management fee £53.
Total fees payable* = 58 months * £53 = £3,067.



*Total Fees payable is based on the conditions that;

  • All interest is frozen by creditors;
  • The client remains on the plan until all debts are cleared;
  • The client's ability to make repayments remains constant and no payments are missed.
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Recent Cases. A sample of some of our recent IVA clients.

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