Adrian and Julie met while they were working together. Adrian subsequently changed jobs but they remained in touch and eventually became a couple. They both had some credit card debt and Julie also had a store card. However, there was nothing which could not be sensibly managed.

Adrian was living in a shared house, and Julie was living at home with her parents. After they had been seeing each other for a year, Adrian and Julie decided that they would rent a 1 bed flat together. They calculated that with their joint income they would be able to afford the rent and bills and still have enough for reasonable living expenses. Adrian took a small personal loan to cover the deposit and first months rent for the flat.

It was their first place of their own and Adrian and Julie did not have any furniture. The flat was part furnished but they decided to buy a number of household items including a bed and a new fridge freezer. They paid for these with buy now, pay later credit. Julie also needed a new car to get to and from work as she now had further to travel and her current car was not reliable. She therefore borrowed £5000 to buy a second hand Fiesta.

After 2 years, Adrian proposed and they decided to get married the following summer. The wedding and honeymoon were planned. The decided to try and keep the wedding costs to the minimum but eventually the amount that they spent totalled nearly £9000. They took a joint bank loan to cover this.

By this time, Adrian and Julie’s debts came to c£28,000 in total. They both had good jobs but the monthly payments were starting to become difficult. They decided to take a joint consolidation loan from the bank which would bring the monthly payments down. They borrowed £18,000 and although they were not able to completely clear all of their debt, this did consolidate a number of their monthly payments, which made things easier.

Having been married for a year, Adrian and Julie had started thinking about having a family. To make this possible, they realised that they would need a 2 bed place to live. They decided that it would be sensible to consider buying and found a two bedroom flat which was within their budget. They needed 5% deposit (c£8000). Julie’s Mother was able to lend them £4000 towards this and Adrian was able to get the other £4000 from one of his credit cards.

Adrian and Julie both feel that after moving into their property, their debts really started to get on top of them. They had to furnish the property and it needed a new oven and washing machine. The property also needed new carpets and had to be decorated. These expenses were paid for through the use of store credit and credit cards. After having lived in the property for 6 months, they realised that they were struggling financially. Their total unsecured debt came to around £62,000 and they were just not able to maintain both their mortgage payments and their monthly debts. Julie was speaking to a friend and found out about the Individual Voluntary Arrangement.

After taking advice from a specialist, Adrian and Julie realised that the only realistic option to deal with their debts was an IVA. They did not want to consider bankruptcy. This would mean loosing the house as there was c£12,000 of equity in the property which would have had to have been released. In addition, Julie worked for a financial services company and declaring bankruptcy would have seriously effected her career. On entering into an IVA, Adrian and Julie are together paying c£425/month. They are prepared to release some equity from their property in the 5th year of their agreement if house prices increase and this is possible. But, they are now able to live happily in their property. They can sensibly afford their IVA payment and their mortgage and household bills. The house and their financial futures and now secure.