Last week, IVA clients, Paul and Carolyn, invited us into their home to talk candidly on camera about their experiences of living within a debt solution. They openly shared the circumstances that had led to their financial difficulties and consequently their IVA, as well as describing how their daily lives had adjusted now that they are redressing their debts.

Below are a series of video diaries reflecting on the different stages of living in an IVA.

How we got into Debt

The turning point – when we realised we needed help

What we would say to others in debt

Below is the transcript of the video diary with Paul and Carolyn:

Hi, would you like to introduce yourselves?

P: Paul Cox, 38 years old and a Warehouse Manager
C: Carolyn Cox, 36 nearly and Cabin Crew. We’ve been together 16 years and have had joint money for about 11 years. When we decided to put joint money together we both had our own loans, credit cards and debts.
P: We consolidated it all. At the time we both had a good wage, no responsibilities bar the mortgage. We had spare money. We never had to save for anything. If anyone asked us if we wanted to go out – it was always a ‘yes’.
C: We always had spare money, and what we didn’t have we put on credit cards. So if we didn’t have it, we just put it on the credit cards. We didn’t really look at prices. We probably didn’t have any value of money really. And then Paul got made redundant.
P: The company went into liquidation three or four years ago. So my salary reduced dramatically.
C: By about half. And he had a company car as well.
P: So obviously the markets out there weren’t very stable and there weren’t a lot of jobs so…

What were you doing before?

P: Again, Warehouse Manager for a computer broker –HP and IBM products. I’d been there from the start up of the company so it was myself and the two directors and it progressed. We had offices in Holland, Germany, South Africa but the one location for the warehouse was ours so we were distributing all the parts. So yeah, that was going for 10 years.
C: We had a nice life for 10 years really. We were both receiving bonuses. We just used to spend really. No savings. A nice life really. And if we decided to pay the credit cards off we’d take a loan out, pay it off, decide not to use the credit card again and then it would creep up; we’d have a holiday and spend more than we thought and that’s pretty much where it came from really. We took credit cards out and then took a loan out to pay them off, but we’d never not paid the money if that makes sense.

We’ve never had letters coming through because we could always afford to pay it back.

P: Yeah, we were always paying the minimum basically but then it obviously carried on increasing the following month.

So it just kept building up and up?

C: Yeah, we basically lived on half the salary but as we had done before. We didn’t adapt our lifestyle at all. And then I fell pregnant which was the turning point.
P: We probably buried our heads in the sand a little bit especially for the first two years/year a half.

So was it a year and half between being made redundant and becoming pregnant?

P & C: Yeah, pretty much.
P: Maybe nearly two. And then I started the new job which I’m in now which is just around the corner and then that’s when Carolyn fell pregnant.
C: And as Cabin Crew as well, as soon as you’re pregnant you come off from flying, so you go back down to having a basic wage again, so it’s not just while you’re on maternity afterwards that your wage drops, it’s the nine months running up before. Because you’re obviously not flying – so you’re not earning, your flying money.
So we had the period of the nine months of me being pregnant and then the nine months of me being off work. Which again… we just seemed to get deeper and deeper. And then when I went back to work we decided the only way we would be able to pay the amount back that we’d been paying before without not paying, would be if I went back full time and do long haul all the time which is not what I wanted to do really with a new born baby. And that’s where it all started.

So was that the point that you realised you needed help?

C: Yeah, it had been coming for about five months but we weren’t sure where to start really.
P: As I said, we’d always covered the costs of paying but we weren’t clearing anything really. And as you say, it was still gradually building up.

So you were treading water really?

C: Basically, yeah. We’ve never not paid but it’s never been going down.
P: So it was recommended by a friend and it went from there.

And as for many couples going through this situation, did it affect each of you differently in terms of your emotions towards it?

P: Yeah, because it was my job with all the money I was earning that had basically halved – I felt a bit like I wasn’t taking care of my family…yeah….you feel a bit dejected.
C: I think the most worrying thing for me was the sudden, the fear all of a sudden that if we couldn’t pay things back we could lose the house. And then all of a sudden I’d got this little person now who needed someone to look after her and this is our home and that’s the most important thing really. So whilst Paul felt that, I felt responsibility for Lucia that obviously we needed to grow up basically at 36 years of age and take a bit of control over our finances and our life really.

I think this is something a lot of people go through

C: Yeah, usually 10 years before

So you reached that point where you decided to seek help, what do you think up until that point was the most difficult part in terms of dealing with managing money. Had it been something you were very aware of with budgeting or do you not think you’d reached that point yet?

C: We didn’t really budget for anything before. If we went food shopping we’d go to Tesco and spend £130 and if we didn’t have it, it would go on the credit card. Neither of us are worriers about money.
P: Our attitude was that if we didn’t have it we’d find it one way or another.
C: And we had a nice social life and so that doesn’t help when you’re out all the time with friends and holidays and …yeah.

So once you got in touch with us at ClearDebt how did you feel about that?

C: Nervous that we might not get it (the IVA). I think really that was the first thing. When we decided to get in touch with you, that was when we decided we really wanted it then.
P: Once we’d been approved and told we’d got it, it was a feeling of relief and we could see the light at the end of the tunnel. You’re not always chasing your tail. There’s a resolution. Yeah, it’s going to be five years but if you look, it’s taken us ten years to gradually build up the debt.

I think that we were just relieved really. I felt that…I wasn’t going to be in debt anymore.

C: Because even though you’re still paying it back it’s not like you owe seven different companies and you’ve not got bills coming through your door that you are aware that you owe money. This to me is like paying the mortgage. It’s just a set amount which goes out every month. It’s a bill – it’s a certain amount that goes out every month and it’s just part of your accounts for the month. And I don’t actually feel like I owe money out. If that makes sense. So it’s just a complete weight off. Massive, massive relief.

I think for a lot of people who go down this route, for some the fear is actually i phoning and having to go through the details with the advisor; and then some of it is about the adjustment – in terms of “now you have to budget” – so how have you adapted to that?

C: We found it difficult as a couple for that.
P: The main one was rather than just going to Tesco or Morrison’s to do everything, now we’ll go for certain bits to Aldi, then Morrison’s.
C: I’ve got a shopping list now of what we can have for the week.
P: We’ll go to Costco if it’s obviously nappies. The washing’s gone up so we’ll buy that in bulk. You know, we’ll try and save a bit of money there. Just learning – we’ve had to save. Whenever people ask us out we can’t always say ‘yes’ – if we’ve got the money then yes we will go out.
C: Or we’ll just go for a drink rather than a meal.
P: We just reign it in that way round …that’s probably the hardest thing – trying to say no to your friends.

I suppose it’s the fact you’ve got a plan for stuff that’s coming up.

C: Yeah, we only have a certain amount each month so if that’s gone on Paul going out with his mates then that doesn’t always mean that we’ve got money to go out as a couple. So we have to…
P: compromise really.
C: And then we both like clothes. So that’s been quite hard as well – not being able to just go out and go shopping and buy what you want. That’s a big adjustment. But we haven’t struggled …it’s just been the luxuries we’ve had to cut back on rather than necessities.
P: It’s given us a focus really to try to work to.
C: Makes me feel quite proud really that we’ve….well we have…we’ve started taking responsibility for everything and well…perhaps we should have done that 10 years ago.
P: Yep – we should have done it a bit sooner.
C: Yeh, we should have done it a few years earlier.

And have people been understanding and supportive? Do people know?

P: Most people do.
C: I tell people
P: Yeh – it’s become the opening line.

I’m just happy that we’ve done it and I don’t think it’s anything to be ashamed of

C: I think all the time at work, there are a lot of people who are in the same position as us but don’t want to talk about it or the don’t want to live to a budget. And you know I can understand that.

Do you find once you say to someone that you’re in this situation that you’re in an IVA and repaying the debt, that they suddenly open up and tell you..”well actually”…

C: Yeh probably but I think a lot of people say “well what’s that?” That’s most people’s response.

So you don’t think many people know what an IVA is?

C: Not really. No. I’ve only known two people who do. We’ve been in the IVA 18 months and there’s only a couple of people I’ve spoken to who have either had one, or know someone who’s had one.
P: So Carolyn telling her friends and has encouraged them to go for help.

I think that’s the pattern isn’t it? Somebody who’s got the strength to understand that it’s a good thing that you’re addressing it and then to tell others.

C: I think the problem is that people think it’s too good to be true. We were only okay with it because we knew somebody who’d gone through it and said it’s a great idea; it’s not too good to be true. It will change everything. And it’ll really help you. I think that’s why we did it. Because we trusted her, that we thought it was okay.
Whereas I think when you go into it not knowing anybody or not knowing what it is – when it’s something you’ve just read in the paper, that it’s just …a bit different.
P: You might worry if you’re going to get pushed into something …or that there’s going to be a catch or something or they’re going to sting you on the backside but it’s not like that. It’s been a breath of fresh air.

And what do you think about the issues for people who are in debt and don’t know where to go – whether to go for free advice, or to a fee-charging debt solution company like ours? How did you make the decision to choose a fee-charging company such as ClearDebt? And how do you feel about the decision that you made?

We’re happy with the decision we made. We felt comfortable straight away. That’s, for me, the main point – being comfortable. The service we got and still receive has been very good. Very responsive.

C: Yep, as soon as we email, you emailed us straight back; you need somebody at the other end – more than a phone service where you’re going to put through to six different people first, so yeah, that one point of contact is very important.

And if you were to say anything to people who watch this video in the future and who haven’t yet decided;,either haven’t yet decided they are in enough debt that they need help or haven’t decided that they’re ready to ask for help – what would you share or pass on to them?

P: Do it sooner. If you can’t resolve it by increasing your income then it’s only going to spiral and get worse. ..so resolve it sooner.
C: I think I would just say that basically, it’s only for five years and five years out of your life is not a long time. We’ve done it for 18 months now and basically it lifts a lot of problems off you. As a couple, if you’re struggling for money and paying things back, it makes things easier. Yeah…I think we should have done it a few years earlier…if we had, we’d be four and half years down the line now instead of one and half. But it’s been great. It’s gone very quick and it’s nice to think in three and a half years we’ll be debt free…which is what it’s all about it, isn’t it.

To find out more about IVA’s and to use our IVA Estimator offering guidance on how much you can reduce your debt by, visit our website.

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