Debt help

Alison & James

James lost his job and during the period of unemployment they had no choice but to rely on credit cards to supplement their income.

Customer Background

Alison and James had used credit for a number of years and always managed to maintain repayments to creditors.

Alison and James also had an investment property but they struggled with a problem tenant who failed to pay rent for many months. The couple had to use their available spare cash to pay two mortgages. Alison’s father lent them £5,000 to fund eviction proceedings. The couple were simply not in a position to make monthly payments to their creditors.

Alison and James were referred to TDA by a financial advisor. Bev Budsworth, MD of TDA had numerous conversations with Alison and James and suggested they put their investment property up for sale which was likely to generate, after costs and repayment of Alison’s father’s advance of £5,000, a sum of £20,000 which could be offered to Alison and James’s unsecured creditors who were owed a total of £79,124. It was hoped they would accept the deal which would give them around 18% of their debt back.

Alison and James’s IVA was approved by creditors and the property eventually sold for £179,000. The debtors were able to provide a lump sum after costs of £18,719 to creditors in full and final settlement of their unsecured liabilities.
Lump sum from sale of investment property: £20,434.00
Mortgage Balance: £144,060.00
Property Worth: £179,000.00
(Clients also paid costs of repair, sale and mortgage arrears on their residential property)

Situation before

Total unsecured debt: £79,124
Approximate monthly commitment to creditors: £1,250

Situation after

60 payments total (to be repaid): £20,434
Dividend to creditors (pence in the £) : £0.20

Debt levels before and after

Alison & James

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