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Joan (not her real name) was referred to Kildare MABS by her local credit
union. Joan is married with two children.
Joan and her husband both work full time. Joan's net pay is £180 per
week, plus overtime. Joan's husband was not aware of the debt problems
that had accumulated by Joan obtaining and using credit cards on a frequent
basis, along with an outstanding loan with the credit union, her indebtedness
had reached over £12,000. All of the bills were in Joan's name only and
had reached a crisis point with arrears accumulating.
We discussed the possibility of Joan talking to her husband with the
intention of getting financial support from him, but this was ruled out
as she did not want him aware of the problem.
We obtained all the relevant information on the debts along with the
credit cards which mostly issued by banks and department stores in the
summer. Joan's overspending needed to be addressed immediately. Because
the majority of the cards at this stage were obsolete, we advised our
client to cut them up and post back to the credit card companies, thereby
reducing some of the charges applicable.
We then wrote to the creditors requesting relevant information on the
accounts, on which we did a thorough check. Once we knew that our client
was liable for the debt, it was time to approach her local credit union
with a view to setting up a special account for reduced payments to creditors
based entirely on her income only. The credit union agreed to accommodate
our client with a Special Account facility. Our client lodges a set amount
on a weekly basis and the credit union then pays this to the creditors
on our client's behalf, subject to the monies having being lodged as instructed.
We discussed how to discharge the debts and how much realistically our
client could afford to pay based on a full assessment of income and expenditure.
With our written proposals to creditors, we enclosed a financial statement,
requesting that they freeze interest and accept an amount with a review
date of three months.
The majority of creditors reacted with disappointment as the accounts
were relatively new, but they agreed to payment via the credit union.
Those who initially did not accept this arrangement, agreed reluctantly
when the situation was explained in more detail.
As a result of the above, our client is paying into the special account
on a weekly basis. It will take a long time to clear the debts. At a later
stage, when she had been on special account for a period of six months
to one year, we will review the repayment schedule with a view to considering
the options available to our client to discharge the debts as quickly
as possible.
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