The Scenario
Paul is solely on benefits - he receives Income Support and Disability living allowance only. He has a full time carer and is unable to work. Paul's money troubles began soon after he was involved in an accident, resulting in his inability to continue working. Before his accident, Paul was a high-flying lawyer, used to living the high life and living off credit. While employed, Paul could afford this lavish lifestyle, as his income more than covered his debt commitments. However, after his tragic accident Paul went from a six figure salary to only earning £90 per week.
Paul now cannot afford the £3,600 monthly payments on his £120,000 unsecured debt and needs a solution fast. He has already lost his Chelsea flat and is now living in emergency housing.
How we could help
There is really only one option available to Paul, which is bankruptcy. He cannot work again and has no property to lose if he does go bankrupt. An IVA would not be an option as his income would not be able to provide a dividend that the creditors would expect.
IVA Option
Some people have much less debt than Paul, and because of the stigma surrounding bankruptcy they do not want to go down that route, even when on benefits. With these cases, providing there is an adequate monthly surplus, the debtor could opt for an IVA instead. For us to be able to proceed, the debtor would have to write a letter to us stating that we have advised them that bankruptcy is the best option for them, but that they do not wish to do this, giving reasons.
* Please note that all characters and scenarios described are fictional, and are purely for illustration purposes
Insolvency Practitioners at Money Debt and Credit Ltd act without any personal liability.
Money Debt and Credit Ltd, Registered in England & Wales No.05588842.
Registered Office: 45 Clarendon Road, Watford WD17 1SZ
Consumer Credit Licence Number: 0580960