Case Studies
Here are some examples of people who have sought our help over the past few
months. Although the situations described are real, the names have been changed
to protect identities.
Young and hopeful
Amanda is 23, single and a trainee solicitor. She used credit to pay her way
through her legal studies and although she now works with a salary of £25,000
per annum, she has debts of more than £15,500. Half of this is a personal loan;
the rest is store and credit cards.
Her creditors
have agreed to accept a
monthly payment of £95 until Amanda has completed her training. Once she has
qualified, her salary is expected to increase quite quickly which will allow
her to increase her monthly repayments and clear her debts.
The single parent
Wilma is a single parent with three children, aged sixteen, seven and four. A
good manager, for a long time she supplemented her income by providing an
ironing service, but, due to a bizarre set of coincidences, she lost all her
customers. Wilma then had to rely on benefits and ended up in debt.
When she came to CCCS she owed both rent and council tax as well as £9,000 on
credit and store cards.
Together with the counsellor, Wilma worked out a plan to clear her rent and
council tax arrears whilst allowing her to pay £60 a month to her creditors.
It will take her a long
time to pay off the debt, but so far she is managing to meet her obligations
while CCCS will be able to provide support and assistance as long as she is on
a
Debt Management Plan. If necessary, CCCS will renegotiate the repayment
plan should Wilma's circumstances change.
Too much credit
Philip and Jean are in their mid-30s with a one-year old baby. Together, they
earn £2,000 per month but have run up debts of over £24,000 excluding their
mortgage.
Their creditors
have accepted repayments of
£450 per month, which should clear their debts in four years.
Changing circumstances
Sheila and George are in their late 70s. George retired from a good position in
the armed forces but after a lifetime in the forces living abroad, they have
found it very difficult to manage their
budget and live within their means. In addition, Sheila is terminally ill,
so there has been some comfort spending. They now owe over £95,000.
Following CCCS advice, the couple are repaying £900 per month to their
creditors. They are reluctant to
consider other options such as bankruptcy
or an
Individual Voluntary Arrangement as they own their home outright and
would lose it.
Reduced income
William is 31 and single. As the manager of a local supermarket, he currently
takes home about £1,200 per month but he used to earn a lot more through
overtime. When his overtime was stopped, he maintained his previous lifestyle
through credit and now owes £15,000 to 10 different
creditors.
In many ways William is lucky; he has no dependents and lives in rented
accommodation. Therefore, together with the counsellor he formulated a
budget which allows him to repay £280 a month and will enable him to
clear his debts in under five years.
Heather and Matt are in their mid-30s and live together with two children aged
eight and six. They owe £8,500 to 10 different creditors
and when Heather had to leave work because of illness, they could no longer make their repayments.
They have agreed a debt repayment plan of £139 over the next five years.
Beware Consolidation
Mark is 32 and separated with two children. His net income is £18,000 and when
he originally contacted CCCS, he owed £15,000 on credit cards and one personal
loan.
This situation was serious enough, but Mark compounded things by taking out a
consolidation loan of £15,000. This was despite the fact that it was obvious
that he would not be able to afford the repayments and so he started using his
credit cards again.
Eventually when he came back to CCCS, he owed £37,000. CCCS has advised him to
make token payments to his creditors
of £1 per month. Once his
divorce settlement has been agreed, CCCS recommends personal bankruptcy
as he has very little
chance of repaying his debts in a reasonable time span.