Financial Management Case Studies

Since 1998 we have set up somewhere in the region of 80,000 plans. No two are ever the same. Here are some examples showing the diverse range of problems we've helped solve.

CSA payments make creditor repayments unaffordable

Debt: £28,000 | Was paying: £850/month | Now paying: £400/month

Client has an income of £1480 per month, and was able to manage repayments on debts of £28,000 while living with his partner and child. The relationship broke down and the client was still able to afford repayments until CSA demanded over a 3rd of his income. With a total of 11 creditors, he was unable to keep up with the repayments, so financial management is the only option. An IVA is not possible at the time as he is 6 months into self employment. This will be reviewed once he is able to prove a steady and ongoing income. He is not a homeowner so can't get an unsecured consolidation loan for such a large amount.
Fees: setup fee £500, monthly management fee £70.50.
Total fees payable* = £500 + (£70.50 x 84months) = £6,490.

Remortgage not a option for Pensioner with debt of over £40K

Debt: £42,000 | Was paying: £910/month | Now paying: £310/month

Client has debts of £42,000 with 8 creditors. He is over 65 years old with £1,270 per month joint income from his own and wife's pensions. He was paying out £819 per month. He owns his home, without a mortgage, valued at over £400,000. He was refused a secured loan due to insufficient disposable income. We have reduced his payment to £310, with a view to getting a secured loan or downsizing his home in the future.
Fees: setup fee £500, monthly management fee £54.63.
Total fees payable* = £500 + (£54.63 x 164 months) = £8,772.

Financial management the only solution for a period of unemployment

Debt: £12,950 | Was paying: £450/month | Now paying: £180/month

This client had affordable credit repayments until her husband lost his job, halving the household income. Two months later their savings were running low so they decided to look for a consolidation loan to reduce monthly payments. Soon they would start to miss payments and needed a solution. The client looked at an IVA but her husband would be returning to work and an IVA would be too permanent as their circumstances would be changing. Financial Management was the right solution for them because the payments were flexible and could be increased when they were both working again.
Fees: setup fee £360, monthly management fee £31.72.
Total fees payable* = 360 + (£31.72 x 87months) = £2,770.

IVA not a option due to unstable employment history

Debt: £21,325 | Was paying: £450/month | Now paying: £200/month

Client lost his job and was out of work for several months. He began living on credit and the debt grew to £21,325. The client started a new job, but must serve a 3 month probation period. He has a value of debt that makes him eligible for an IVA. However, the fact that he had just started a new job and has recently had a period without work means this option is not currently available to him. Ceditors need to be confident that IVA payments will be made at the agreed rate each and every month for 5 years. A Financial  Management plan is more flexible in this respect and suits this client's situation.
Fees: setup fee £400, monthly management fee £35.25
Total fees payable* = (2 x £200) + (£35.25 x 87months) = £3466.

Debts of £83,350 but not able to write off any with an IVA

Debt: £83,350 | Was paying: £2300/month | Now paying: £980/month

Client takes home £3,750 a month and jointly owns a property with her husband. These factors have enabled her to amass £88,350 of unsecured debts. Due to the high debt, Client contacted us about an IVA. On speaking to one of our advisors it was explained that working within the guidelines of an IVA she would be paying back the full amount to her creditors. (60months x disposable income + £20,000 remortgage = the original debt). The client was not aware of Financial Management and on finding out more decided this was the best option for her circumstances.
Fees: setup fee £500, monthly management fee £100.
Total fees payable* = (500) + (£100 x 93months) = £9,800.

*Total Fees payable is based on the conditions that;

• All interest is frozen by creditors.
• The client remains on the plan until all debts are cleared.
• The client's ability to make repayments remains constant and no payments are missed.