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Michael and Laura took out a loan which was secured against their property. At the time it was easy to borrow more than the value of their property and this was used for general home improvements, as they had recently purchased their first home.

They also used credit for general living expenses and to supplement their income. They generally paid the minimum amounts due, this caused no issues for a while, however the level of interest and charges began to accrue and they found it increasingly difficult to maintain the minimum payments.

Despite paying £300 per month on their secured loan the balance did not seem to decrease. Along with their other credit commitments growing, they found it harder to make the minimum payments due.

Michael and Laura had been in a debt management plan for 7 years, however their house was in negative equity and the debt management plan did not seem to be decreasing the overall level of their indebtedness.

To compound their situation further the business Laura was a director of a company that unfortunately had to be wound up. As such her income decreased dramatically, and she was only receiving job seekers allowance. Michael and Laura found that they were unable to make even the minimum repayments to both their secured and unsecured creditors. Between them they had around £40,000 unsecured debt.

The situation was extremely worrying and the most stressful thing to endure. Their health was beginning to suffer, the relationship suffered and the stress effected Michael’s effectiveness at work.

The Debt Advisor helped Michael and Laura prepare petition documents and guided them through the process of making themselves bankrupt.

Michael & Laura’s comments:

“It was scary to have to go to court as it was their first and last time. It was however, a very valuable experience and we know are much more aware of the need to manage our  income and expenditure. We have definitely put in place measures to ensure we never end up in that situation again. It has been a hard lesson to learn but have come through it as better more educated people.”

situation before Bankruptcy

Total Unsecured Debt


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