The background
Having a baby should be a happy event for a family, but unplanned medical incidents can have an impact on your financial stability.
We were contacted by a young couple who had recently had a new baby, their third child. Shortly after giving birth, the mother had suffered a stroke, which meant she remained in hospital, whilst the baby went home with the father.
Dad worked in a factory and was only allowed Statutory Sick Pay whilst absent from work, looking after his three young children and his poorly wife. The time taken off work spanned several weeks.
Prior to the baby being born, the couple had some personal debt which they were managing. To make up the shortfall between the benefits and what the family needed to keep a roof over their heads and to clothe and feed everyone, further credit was used.
What happened next?
The husband returned to work, but his wife was unable to work. They struggled to pay their credit and were now not managing their accrued debt.
Dorothy Brown, licensed Insolvency Practitioner at Even Keel Solutions says, “I can remember when we met discussing their income and expenditure and saying that I thought something did not add up. The couple told me that the children were fed everyday but for two weeks of every month, they ate baked beans on toast.”
This obviously was not sustainable for the family. By discussing all their options, it was felt that an
Individual Voluntary Arrangement (IVA) was the best option for them. A budget was agreed upon, which meant that they paid a single amount every month to their creditors. This was agreed with the creditors and became a legally binding agreement.
The end result
The family remained in their home and creditors were paid a percentage of what they were owed over a period of 5 years.
Dorothy adds, “Whilst there may be arguments for and against using credit to maintain daily life, a life event such as ill health can knock anyone off their path and impact upon a family or individual’s financial situations.
There is a lot of advice available for people in this situation, such as Martin Lewis’ website
www.moneysavingexpert.com . A discussion with a licensed Insolvency Practitioner can help too, to try and find the best solution.”
