Case Studies
The following are examples of the types of situations that people can find themselves in.
I was sure I was going to go bankrupt.
Pat was an IT professional in Dublin working for a large multi-national company... "I had a successful well paid job and enjoyed two foreign holidays a year with my wife (who also worked) and child. I never really saved much but was able to handle credit card repayments, car loan and mortgage repayments relatively easily.
Unfortunately I was made redundant and it took nearly a year to get another job. During that time my wife had a second child and had to quit work due to high childcare costs. At first I could cope financially but quickly used up the lump sum I got from my ex-employer. Then I ended up relying heavily on credit cards to fund our day to day living. It was an extremely stressful time for my wife and me.
I was delighted when I got a new job. However my salary was barely enough to meet my monthly credit card and other loan repayments. It came to the stage I was sure I would go bankrupt. It was then I got financial advice and they explained I did not need to go bankrupt as an IVA with my creditors allowed me to make a single affordable payment each month. I will be debt free in 5 years and no longer have the stress of money worries."
My debt built up over a number of years
John was single and living with his parents. He had build up debts of €40,000 from car loans, credit cards and bank overdraft.
John took out a consolidated loan but was having difficulty meeting the €800 monthly repayments from his net income of €1,500 per month and had started falling behind with repayments.
John then turned for financial advice as he fell further into debt. An IVA proposal was put to John's creditors and a monthly repayment of €500 for 5 years was agreed with them. This meant John would only pay €30,000 of the €40,000 and all interest was frozen.
Mark was recently divorced and suffered financial difficulties
Mark is a civil servant in his late thirties and recently divorced.
Mark has two children and moved in with his parents after the divorce. He pays his wife €450 per month maintenance.
The financial strain of the divorce left Mark with overdrafts, credit cards and outstanding loans of €40,000. This was also complicated by the fact that some of the loans were still in joint names with his ex-wife.
Mark's net income after tax was €2,000 per month. His living expenses including maintenance were €1,500. This meant he only had €500 a month to pay his creditors and this was not enough to meet these repayments.
Mark considered going bankrupt but following financial advice an IVA solution was proposed and agreed with his creditors. Under the proposal Mark would made a monthly payment of €450 for 5 years to clear his debts. As a result Mark would only repay €24,000 of the €40,000 he owed.