When Alice and Gerald took out a loan and used their credit card to fund some improvements to their property, they'd always planned for it to be fully repaid before Gerald retired. So when they were left with only a pension income coming in and their debts still to be repaid, they found themselves with more money going out than coming in.
Initially reluctant to fall behind with the monthly repayments, they relied on their overdraft and other credit cards to help bridge the gap, but once all their lines of credit were exhausted they started to fall into arrears and were even falling behind with priorities like water and electricity.
Alice and Gerald were too embarrassed to tell their family about their debt problems, they were scared they'd lose their family home and had no idea where to turn for help.
An advisor at one of our partner organisations identified that Alice and Gerald were struggling with multiple debts and explained that free, confidential debt advice was available. With Alice’s permission, they warm transferred her directly through to our helpline.
Debt advice appointment
Our debt advisor identified that Alice and Gerald were missing out on income from Support for Mortgage Interest (SMI), Council Tax Benefit and Pension Credits and provided them with information on how to apply for these.
She also worked with Alice to build a clear picture of their financial position, putting together a list of their creditors and taking details of their income, expenditure and assets. The budget showed that after meeting all their day to day living expenses they had a surplus income of £140 each month to repay their debts of £22,188.
They were recommended a debt management plan (DMP) as this would allow them to repay their debts at an affordable amount each month, and would also be flexible enough to allow them to increase the payments once they received their additional benefits allowing them to clear their debts much faster.
Alice and Gerald made the first payment to their DMP in January 2015 and have now submitted their claim for SMI. Once this is approved, we'll conduct a review of their budget and adjust their DMP payment accordingly.
With the worry of their debt problem now lifted, they've been able to take control of their finances and are able to focus on their health and enjoying their retirement.
*Names have been changed to protect the clients’ identities