Contractor who lost work during pandemic builds the foundation for a debt-free future
This client reached out to Advice NI’s Debt Service by email. The client lives with his partner with no dependents and no assets.
The Full Picture
He lost his job as a subcontractor earlier this year and hasn’t found work with the same level of income. All his savings have been used and he had applied for benefits. The Client returned to full-time work on minimum wage. He lives with his partner who was on furlough, receiving 80% of their wage, which does not cover all household bills.
The client’s debts were solely in his name and totalled over £25,000. The debts consisted of credit cards, store cards and an arranged overdraft that was no longer manageable. The client had taken payment holidays where possible in order to minimise the debt growing, however, as the situation over his lack of improved employment had not changed, the client wanted to look at a longer-term option for debt solutions.
How We Helped
The client contacted Advice NI by email, indicating that written communication would be easier to understand as English is not his first language. The client was offered translation services by the adviser, but declined saying he did not need this service.
The adviser outlined the options and assessed their suitability for the client. A Debt Relief Order (DRO) was not an option due to level of debt and surplus income. The adviser then looked at an Individual Voluntary Arrangement (IVA) as the client’s surplus income was under £100 per month.
After consideration the client felt bankruptcy would be his best option, as they would be cleared from debts sooner than with an IVA.
The adviser discussed setting up a new safe bank account as the overdraft would be going in to bankruptcy application and the account would be closed. The client visits their native country often and it was explained to him that within the first 12 months of a discharge period in bankruptcy they would have to apply to court for leave from country. There were no assets or savings in any aspect for risk in bankruptcy.
Following an assessment of all options and the client deciding on bankruptcy, which the adviser is helping with, the client wrote to the adviser to say “thank you, you helped a lot”.