Our debt problems began five years ago when my husband lost his job at the same time as our landlord gave us notice to leave our flat. All at once, our income had halved, and we had to find about two thousand pounds for a deposit on a new flat and all the moving expenses. It was awful; we had no savings, and we had to take out another credit card in my name to pay for it all.
Once we moved into our new flat, my husband became more and more depressed and struggled to look for work. I soon found I was using my credit card more and more, and we were quickly falling further into debt- some months we were even struggling to meet the minimum monthly repayments. I was becoming increasingly worried about not being able to pay the rent.
Finding the right advice
We decided that we needed financial advice when I reached the end of my credit limit and found that I just couldn’t get anymore. Luckily, I had been warned about not using extortionate payday loan companies as otherwise our situation would have been even worse.
I made an appointment with a local debt advisor who had been recommended and received some helpful debt counselling from a trained lady, who was friendly and non-judgmental. On her advice, we brought in all the paperwork relating to our debts, so that she could look in detail at all our income and outgoings. She confirmed that out situations was pretty serious and recommended setting up an Individual Voluntary Arrangement or IVA with our creditors.
How an IVA works
An IVA is a formal repayment proposal between a debtor and his or her creditors. In our case, we agreed to repay a proportion of the credit card debt every month for four years. This meant that the lender would get much more money than if we went bankrupt- which was the only other alternative. There are many advantages to having an IVA- the main one being that you only pay back what you can actually afford each month.
We felt much more positive than before after receiving professional debt advice; we finally felt as if we were regaining some degree of control over our lives.
A positive outcome
Happily, we repaid the final instalment to our creditors this year, and the debt has now been wiped clean. All interest was frozen on the debt for the term of the IVA- I dread to think how much debt we would have been in if we hadn’t sought help when we did. Thanks to the expert help, the whole process of setting up the IVA was relatively stress-free.
My husband has recently got another job, and we are now thinking about buying a house for the first time. Again, I am so pleased that we decided to go down the IVA route, rather than applying for bankruptcy as that would have made getting a mortgage very difficult, as well as meaning that I wouldn’t be able to be a governor at my child’s school.
I would highly recommend using an IVA to anyone else who is struggling with debt. The monthly repayments are designed to be manageable according to your income and, as long as you continue to meet them for the period of the IVA and live within your means, a life without debt is easily within reach- there is light at the end of the tunnel with an IVA!