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Debt help

Ethel

Ethel approached The Debt Advisor with over £61,000 worth of debts.

Customer Background

She was previously an Adult Mental Health community worker but retired after she started to suffer with osteoarthritis in both of her knees which affected her ability to travel to see her clients. In an effort to delay retiring, she had purchased an automatic vehicle on finance and struggled with the repayments. Unfortunately, Ethel had to eventually retire due to her health.

Due to Ethel’s retirement, she started to use credit to cover her priority bills. As a result, the level of debt increased along with her monthly repayments. Eventually, it meant that her entire disposable income was used to repay her creditors and then credit was used for her living expenses.

Ethel then remortgaged her property and used the funds in an attempt to consolidate her debts, repay the car finance and cover her other unsecured debts. However, she couldn’t bring the debts down to a more manageable level where she could afford the minimum repayments without utilising further credit.

Ethel contacted The Debt Advisor and spoke to our team who understood her issues and worries. At this point, Ethel had already been approved for an equity release in the sum of £37,800, subject to a surveyor’s valuation. In addition to this, Ethel also had access to savings in the sum of £8,000.

As a result, the best option for Ethel was to pay the lump sum of £8,000 from her savings and £37,800 from the equity release into the IVA for the benefit of the creditors, giving an estimated return of 61 pence in the pound.

The final distribution eventually gave creditors a return of 61.8 pence in the pound and the Full and Final IVA was successfully concluded just 4 months after the IVA was approved. All monies due were introduced within the timeframes of the IVA proposal and the IVA was closed 8 months earlier than originally proposed.

Lump Sum From Savings: £8,000.00
Lump Sum from Equity Release: £37,800.00
Total to be repaid by client: £45,800.00

Situation before

Total unsecured debt: £61,636

Situation after

60 payments total (to be repaid): £45,800
Dividend to creditors (pence in the £) : £0.62

Debt levels before and after

Ethel

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