CCCS solution: IVA recommended
37-year-old Gwen and her husband faced serious financial difficulties after they were both made redundant within weeks of each other.
Owing nearly £100,000 across 11 credit cards, overdrafts and personal loans, the couple went on an active job search and relocated to find jobs in a different part of the country.
The couple notified their creditors of their new contact details. However, one creditor failed to record the change in circumstances and lost touch with the couple. With no contact from the creditor, they soon forgot about the outstanding money still owed.
Eight years later, after substantial interest had accumulated, the creditor tracked them down and tried to enforce the debt, even though it was now barred by statute.
To add to the difficulties, Gwen’s husband was made redundant for the second time and Gwen fell pregnant with the couple’s second child. Gwen was forced to give up work because child care would have cost the couple almost £1,200 a month – the equivalent of her husband’s monthly salary.
A miscalculation on their child benefit payments also meant that the amount they were receiving was cut significantly.
Desperate to remedy their situation, the couple reached out a fee-charging debt advice company for support. Unfortunately, the advice they were given was unrealistic. The company enrolled them on an drawn-out debt management plan, which would take the couple 17 years to complete, charging three months’ worth of payments as a set-up fee and a 20 percent monthly management fee thereafter.
In addition to the fees they were charged, the company failed to pay the creditors after the first three months, which meant that Gwen and her husband had the added stress of being hassled for the outstanding balances.
After some research into debt advice, Gwen decided to contact CCCS. She was advised of all her options and it came as a relief to Gwen that that the forgotten debt was statute barred. An individual voluntary arrangement (IVA) was proposed, and another counselling session has been arranged in order for Gwen to decide what course she and her husband should take.
Gwen warns people to be wary of fee charging agencies and says that the help that CCCS provided was “invaluable”. She said: “Nobody explained my options at all at first. They were all just taking my money, and no one was giving me the correct advice.
“When you're in a panic, you go wherever you can to find the friendliest voice at the time, which won't always give you the best service.
“We still have the same debts, and haven’t taken on any more. We’ve just been incredibly unlucky, and weren’t able to pay them off, so things escalated.
“CCCS is the first organisation I really trust to act in my best interests and sort my situation out.”