Debt Management Plan Case Studies

ClearDebt assist many clients with Debt Management Plans. Please take some time to read through the below case studies which demonstrate how we've helped clients in recent years.

To protect the privacy of our clients' identities, personal details have been changed. To find out more about the fees we charge for debt management cases, visit the DMP Fees Explanation page.

 

Monthly debt payments slashed by more than £900

Debt: £58,000
Was paying: £1267 per month
Now paying: £300 per month

David had £200,000 equity in his home but had unsecured debts of £58,000. He was unable to pay 11 creditors from his monthly income of £1,060.

David's assets were more than his debts, however he did not want to sell his property or remortgage - he'd recently become self employed and didn't want to risk losing his home should his business not prosper. Whilst he could have done an IVA, this would have meant he had to release equity from the house - so a Debt Management Plan suited his needs more. In his situation creditors would not agree to the IVA proposal when he could repay them in full by selling his property. A Debt Management Plan would allow David some respite from his creditors - giving him time to focus on building his business without the fear of court action or losing his home. Of course, it meant he'd need to build his business without access to credit - but at his debt levels - this was unlikely to be available anyway.

 

DMP helped get through financial difficulties cause by illness

Debt: £36,500
Was paying: £703 per month
Now paying: £200 per month

Mary's financial problems started when she became ill. After 3 months off work her wages were reduced to statutory sick pay. The strain of the illness and financial difficulty resulted in the breakdown of her relationship which increased her living costs. She ended up living on credit and fell further into debt. When she recovered from her illness she returned to work but her income did not cover her debt repayments.

To agree to an IVA, creditors need to be confident IVA payments can be made every month for 5 years. Mary's unfortunate and unavoidable long absence, due to illness, meant they were unlikely to agree to an IVA. Instead, Mary set up a Debt Management Plan to lower her repayments with a view to considering the possibility of an IVA 6-12 months later.

 

Maternity leave income reduction makes debt repayments a struggle

Debt: £11,000
Was paying: £502 per month
Now paying: £285 per month

This is an example of how a joint debt management application helped a couple expecting their first baby.

Due to maternity leave Emma and Darren Smith's income decreased and, when taking into account the additional costs of having a baby, they began to struggle, even though they were not currently in arrears with any of their 8 creditors.

They realised their circumstances would keep changing over the next few years and wanted a debt solution which would work with them to clear their debts in a manageable way.

 

To find out if a Debt Management Plan is the right option for you complete our online contact form now and one of our advisors will be in touch:

Is a Debt Management Plan right for me?