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Klaudia was struggling with unsecured debts over £50,000 made up of loans, overdrafts and credit cards. She took out a consolidation loan of £18,000 but this still left her with around £25,000 other debts with minimum payments in excess of £500 per month.

Klaudia struggled on for a few years but ended up with even more debt as interest had been added to her loan and she had to use credit cards to fund everyday living.

Klaudia had a property she was keen to protect and was desperate to avoid bankruptcy. She was referred to The Debt Advisor Ltd and it appeared an IVA offering her surplus of £368 per month for 5 years would allow her to repay around 34% of her unsecured debt.

situation before IVA

Total Unsecured Debt

£50,809.00

Surplus income

£368.00

Monthly commitment to creditors

£1,524.00

Shortfall

£-1,156.00

approved IVA solution

Monthly contributions:

48 x £368
12 x £617

(Creditors requested an additional 12 payments at the meeting of creditors)

£25,068.00

Mortgage balance

£117,000.00

Property worth

£99,400.00
As the property was worth considerably less than the mortgage, it was unlikely that in year 5 of Zoe’s IVA, she would have any equity in the property and would be able to conclude her IVA after 60 months.

Total to be repaid by client

£25,742.00

Divided accepted by creditors (per £)

£0.43