Individual Voluntary Arrangements Case Study 1
IVA debt reduction
Individual Voluntary Arrangements Case Study 1:
John the taxi driver
Together W3 Debt Solutions and John were successful in getting the creditor to stop all contact and to write off the debt.
John is self employed taxi driver aged 45. 4 years ago John's marriage broke down and after several attempts at reconciliation he became divorced. Following the breakdown of his marriage John left the marital home and moved to rented accommodation. His wife and 2 young children remained in the home.
John has since remarried and has a child by his new wife. When John's first marriage broke down he already had several outstanding personal loans but his finances were under control as both he and his wife were working full time.
When John left the marital home he had to find new accommodation for himself and he also had to provide financial support for his children. Partly as a result of the strain in his personal life and partly due to unforeseen circumstances John's income also reduced as he was not able to do as many hours work as he had done in the past.
The combined effect of the existing debts, reduction in income and additional expenses meant that John could not manage to pay all his debts. When John remarried and his wife gave birth to their new child the situation became unmanageable. Debts were increasing due to the addition of interest and costs. In addition to his debts John had neglected to complete income tax returns and pay outstanding tax bills.
An individual voluntary arrangement suited John because he is able to work full time and wished to continue working as a self employed taxi driver doing the job he enjoyed. John did not want to walk away from his debts but on the other hand, without a individual voluntary arrangement he could see no way of repaying them.
We helped John to set up an Individual Voluntary Arrangement which all creditors including the Inland Revenue were happy to support.
An Individual Voluntary Arrangement has been agreed with creditors whereby John is now paying a single monthly payment for 60 months and since he got a debt reduction of 75% he will be free from debt completely in the next few years. While such significant debt reductions as John took advantage of are not at all commonplace, in specific circumstances comparable results are certainly achievable.