IVA Lump Sum

David and Susan had lost control of their spending. Each was buying things that they thought they could afford. Their finances were stretched by going regularly on two foreign holidays a year, eating out, buying expensive clothes and having a large mortgage. Both thought that if the banks were lending them money then they obviously could afford it.

David started ignoring letters from credit card companies as did Susan to such a degree that they didn't even open letters that looked like a bills. Both started to get more and more stressed and their relationship started to suffer. David was signed off work with anxiety and stress and Susan suffered from insomnia. It was David who realised what had caused their illnesses, ignoring their debt problem. He then decided to take the bull by the horns and do a Statement of Affairs of their current financial circumstance. Both of them didn't really know how much the owed.

The result made for horrific reading. After all their debts had been totalled up, David discovered that their total debt was £85,000! They had been overspending by approximately £1500 a month over the last four years with nothing really to show for it.

The good news was they were able to release their equity by re-mortgaging their house to generate £30,000. They paid this into an IVA as a lump sum which was accepted by their creditors and 65 %,( £55,000) was written off.