The background
A couple with two young children had handed their property back to the mortgage company as they felt they could not afford to pay the mortgage. It was an extremely tough decision to make, but after discussions with each other, they felt this was best for their family.
One of the reasons they felt they could not afford the mortgage was they had other debts totalling around £70K. They were using loans and credit cards to supplement their income. After a number of years in a job, one of them was made redundant. This had a huge impact upon the family finances and meant that their ongoing monthly payments were under pressure and credit cards were used to make up the shortfall.
What happened next?
The couple approached us to ask for advice. We explored their monthly income and expenditure and worked out that they had a monthly surplus; beyond paying their priority debts and maintaining their household.
We discussed whether they felt
Bankruptcy was best for them or if they would prefer to enter into an
Individual Voluntary Arrangement (IVA). The former being the alternate to the latter. An IVA is a legal agreement, between the debtors and the creditors. It can be over a number of months, or years depending on the circumstances.
The end result
The couple decided that an IVA was best for their personal circumstances. They put forward proposals to their creditors and it was agreed that an IVA was acceptable. In this instance it would last for just over 5 years.
We worked with them with their change of circumstances (which does happen in families over such a period of time), through COVID-19 and its impacts.
Dorothy Brown, licensed Insolvency Practitioner at
Even Keel Solutions said “Whilst I have no doubt it was very hard, this couple determinedly stuck to the terms agreed and came to the end of their IVA this year (2022). I believe it was a good outcome for all parties and the couple are now debt free and able to rebuild their credit moving forward.”
