Case Study....

In March 2006 Mr & Mrs Evans took out a £15,000 unsecured loan with their bank to fund essential home improvements. At the time they were both working full time and therefore anticipated that the repayments would be readily affordable.

Towards the end on 2006 Mr & Mrs Evans discovered that they were expecting their first child and in July 2007 Mrs Evans began her maternity leave. She received 90% of her pay for the first 6 weeks but then her income reduced to Statutory Maternity Pay. Household income had reduced by £1200.00 per month at a time when increased expenditure was necessary.

In order to buy essential items for their new baby, Mr & Mrs Evans had to use their credit cards. They were not overly worried about this as Mrs Evans was intending to return to work and the credit cards could always be repaid when this occurred. However, due to the associated costs of childcare in addition to other personal circumstances, Mrs Evans was unable to return to work. It was at this time that the couple decided to consolidate their borrowings by taking out two further loans over 5 years.

In 2008 Mr Evans was shocked to receive notice from his employer that he was being made redundant. Finding alternative employment proved difficult and once again credit cards were heavily relied upon. Although Mr Evans did ultimately find a new position this was at a much reduced salary.

Mr & Mrs Evans approached CFM for help in November 2008. By this time they had three loans and four credit cards. The total combined debt was £39,641.80 and their contractual monthly payments totalled £942.00. After negotiating with their creditors we were able to reduce their monthly repayments to £237.85 thus saving them £704.15 per month. This step put Mr & Mrs Evans back in control of their finances. They could now comfortably afford their repayments and as all creditors agreed to suspend interest in this case every penny that they paid went towards reducing their debt.

After a period of six months, we were able to negotiate short settlements on two of Mr & Mrs Evans’s credit cards. The combined balance on these cards stood at £7468.50 but the creditor agreed to accept £2240.55 in short settlement....this saved Mr & Mrs Evans a further £5227.95. 

 

We continue to work with Mr & Mrs Evans and we are confident that they will now be debt free within a relatively short period of time.

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