Debt Management Examples

Mrs Jones contacted our office last march in need of some friendly advice. At the time she was struggling to keep up with her repayments to all of her different creditors. This was due to her being made redundant and the few months out of work had made her fall behind with the payments and fall into arrears. With the arrears in place, Mrs Jones knew it would be very difficult to catch up with her payments considering she had rent to pay and household bills also.

The debts that Mrs Jones had consisted of:

1 loan with Lloyds 7.5k - expected to pay £230 per month
Credit card with Lloyds with 2.5k - expected minimum payment of £80 per month
Credit card with Barclays with 2.8k outstanding - minimum payment of £150 per month
Catalogue with Littlewoods with 1.2k outstanding - minimum payment of £80 per month
An old mobile phone bill which had been disconnected with a balance of £650 - expected to pay £100 per month

All of her debts totaled to £9,655 with expected monthly outgoings of £640. With her rent and household bill on top, Mrs Jones had more money going out each month than what was actually coming in!

After taking all of her essential outgoings from her income, our advisors established that in fact, Mrs Jones could only afford to pay £200 per month to creditors. Therefore, the best solution for her was a debt management plan. We took all of her debts off her, so she didn't have to worry about making any further payments to her creditors, we negotiated with the creditors to freeze all of their interest and charges so that she was just paying back what she owed (rather than all of the 'dead money' she was paying to several interest rates) and we gave her an end date to getting these debts paid off (which was 5yrs if all balances were correct, but was flexible if her circumstances changed at all).

Creditor	Amount Owed	Monthly Repayment
Lloyds Loan	7500	£230pm
Lloyds Credit card	2500	£80pm
Barclaycard	2800	£150pm
Littlewoods	1200	£80pm
Vodafone	650	£100pm
TOTAL	9655	£640pm

NOW, with a debt management plan in place, Mrs Jones pays £200 per month over 5 years. A £440 saving per month!

Apply for: Debt Management

Or for free, no obligation help and advice freephone 08000 122 118.

"Initially I applied for a loan to consolidate my debts. However, after speaking to one of your advisors, it became clear that a far better solution would be to go on one of your financial management plans...

Everything was made so simple and the continual support and advice you have provided from my initial enquiry and whilst on my financial management plan has resulted in my debts nearly being clear now! I can't thank you enough for your help."

Janet N, Birmingham