Case Study of a Client with Debt and Health Problems

Name - Mr H
Age - 37
Marital Status - Single
Location - Banbury
Occupation - ex Army
Total Unsecured Debt - £89,253
Previous Monthly Repayments - £872 (approx)
Background Problems - Retired from Army due to ill health resulting in a reduced income. Reliance on credit to supplement income. Divorce and continuing ill health.

Mr H. had retired from the army due to ill health. He managed to find work on a commission-based income however he found it increasingly difficult to manage on the reduced earnings and began relying on credit to supplement his income and used credit to pay credit in a classic ‘rob Peter to pay Paul’ scenario. At one point ill health resulted in his army pension being his only source of income and the downward spiral of debt continued. He secured employment as a security guard for a number of years but he suffered a mental breakdown and was pensioned off.

As a consequence of the ever-increasing debt his health problems increased and his marriage failed. Mr H. attempted to resolve his financial problems through a debt management plan, which incorrectly calculated his disposable income as £437. However, they charged a monthly fee of £77, and therefore from his payment of £437 only £360 was paid to his creditors. If interest and charges had been frozen, which is highly unlikely, it would take him 21 years to settle his debt!

Realising he needed to take positive steps towards clearing his debts to enable him to move forward in life he approached ACCUMA whose experienced staff helped and guided him through the options available. An Individual Voluntary Arrangement (I.V.A.) was proposed to his 12 creditors and was successfully approved.

Mr H. now repays an affordable £604 each month. All interest and charges have been frozen, creditors no longer chase payments and in just 60 months he will be debt free having only repaid £36,240 of the original £89,253 he owed.