Case Studies
Lisa from London
Lisa is single, aged 25 and had lived in her mortgaged property for two years. She was working as a hairdresser in her local salon when she contacted Newtomorrow.
Over the past 3 years Lisa had been putting her grocery shopping, clothes and utility bills on her credit cards. Lisa’s income was £15,500 per year and she had been struggling to maintain a decent standard of living without using her credit cards.
She owed £10,000 to 5 different creditors and did not know how to solve her debt problem. Lisa thought that she could pay the credit cards each month until the interest became unbearable. Lisa was feeling under pressure and thought there was no way out of her financial predicament.
Lisa thought that she would have to go bankrupt and would lose her house, until she spoke to Newtomorrow. We suggested that she should enter into a Debt Management Plan. Lisa only had £350 available for her debts so we organised a payment plan for Lisa.
Lisa now pays £350 a month for 2 ½ years, after which she will be debt free. Lisa can now look forward to the future without the worry of debt.
Michael and Rebecca from Newcastle
Michael was 37 with three young children under the age of 12. He lived with his wife, Rebecca, in their own home and together they had debts of £29,000.
Michael was a shop floor assistant in a local supermarket while Rebecca stayed at home to look after their youngest child aged 3.
They have used credit cards to go on a yearly holiday, buy new household furniture and pay necessary bills. Michael and Rebecca thought that they could afford the repayments on the credit cards. However, after several years of living off credit cards the total minimum payment each month were almost the same as Michael’s monthly wage.
Rebecca convinced Michael to speak to Newtomorrow because her friend had suggested that we could help their specific situation. Michael and Rebecca both felt embarrassed about their finances but realised they had to do something to get rid of their £29,000 debt.
In 1997, Michael and Rebecca bought their own home for £70,000 and it is now worth £103,000. This means they have £33,000 of equity available in their property which could potentially clear their debts.
When Michael and Rebecca contacted Newtomorrow about their debts our advice was to re-mortgage and release the money tied up in their home. They followed our advice and are now debt free and much happier. If Michael and Rebecca did not want to re-mortgage we could have found another solution for them which would have been a debt management plan.
Michael sent us a letter saying ‘I feel like a weight has been lifted off our shoulders, I thought we would be in debt forever….. Thank you so much for your advice and for helping us to become debt-free.’
John and Anne from Manchester
John is a call centre manager and Anne is an accounts administrator but is on long term sick for the past nine months. They have 2 grown up children both of whom have been through University and left their home which they jointly own. Their debt problems started many years ago with numerous credit cards. They had addressed the problem through a number of consolidation loans and released equity in their property one year ago. Currently, they have equity in their property of £4,500 due to rising house prices in their area.
The consolidation loans and re-mortgage addressed the problem in the short term but the loss of Anne’s wage led to an increasing debt problem. John and Anne were embarrassed about their situation and took out additional credit cards just to make ends meet.
The stress began to effected their health and marriage. By this time they owed just under £100,000 to various creditors. When they finally faced up to the problem and sought advice from a friend, he suggested that they should speak to Newtomorrow.
John contacted Newtomorrow and discussed the debt problems that they were having. Newtomorrow explained the debt solutions that were available to John and Anne. In reality the only possible way to solve the problem was via an IVA.
The IVA solution was agreed and 11 weeks after first contacting Newtomorrow, John signed the IVA agreement. John and Anne now pay a monthly contribution of £600 and, due to increasing house prices, are about to release equity of £8,000 from their home. John and Anne will contribute £37,000 to their creditors over the 5 years of the IVA, when they will be debt free.