Room to Breathe

John and Anna are middle-aged married couple with a house in Wrexham, bringing up a teenage son and daughter. John was recently forced to take a reduction in hours at work, as the business he works for struggle through the recession. They now have a monthly income of around £2,200 between them.

John and Anna have a £125,000 balance on an interest-only mortgage but, struggling after their fall in income, are now in arrears by three months, totalling £2,500. They also owe £1,200 in council tax arrears, and are facing action by bailiffs for the outstanding amount. They also owe over £15,000 to credit cards and other debts, but have a surplus of only £200 a month to make repayments with.

The couple also have a very modest amount of savings, but have no equity in their property. They are however in line to receive an amount of money in inheritance which is roughly equal to their unsecured debts. However, legal wrangling is holding this up, and John and Anna needed to address their debts immediately because of the bailiffs.

It was the threat of bailiffs that prompted John to contact CCCS. After a full analysis of their monthly budget, CCCS advised them to pay just over half their council tax immediately using their savings; they will offer payments of £70 per month for 9 months to clear the remainder as part of a three year Debt Management Plan, which will give them some breathing space. When the issues around their inheritance are resolved, they can use this to settle their debts in full.