A successful ClearDebt IVA holder, “Struggling 63”, whose IVA completed in July 2010, shares his story of debts and how an IVA changed his life and his attitude to money:

“When I look back, it’s easy to see I’ve always relied on credit – ever since leaving school in 1979.

When I got my first job, age 16 and paying £82 a week, I asked my dad to lay out the money and buy me a stereo. He took the loan out and I paid him back, but there it was…my first introduction to loans and credit.

I got my first credit card at the age of 18.  The credit limit was £800.  I remember it so well – it was a real wow moment.  And yes, I showed off to friends with it, most of whom were still at college and had very little money available to them.

Needless to say, whilst I didn’t go up to the limit, the limit got increased.  Within 12 months or so it was up to £1500 and I owed about £1200.  Then came the first hiccup.  I decided I didn’t like my job anymore and wanted to go back to college to do my A Levels.  To start fresh, I used all my savings to pay off the card and embarked on my studies.  The change was great and I loved being back in education but I still had my card.  It didn’t take long before it was in use and up to it’s full limit this time.  Although a part time job meant I was able to meet the minimum payments the warning bells should have been going off.  They weren’t.

After gaining my A Levels, I moved to Manchester to look for work.  My credit card (thank goodness, just the one at this stage) came in handy as it paid my rent, bought my food and paid for my socialising for a brief period until I found work.  A month later I’d found work  which was a good, well paid, secure job.  Within 18 months I decided I wanted to buy a house and of course that led me to wanting the things that go with it!

Upon buying the house I soon ran my card up and ended up applying for another and then another, all of which helped me furnish and improve my home. I was still managing to make my repayments and in my head believed everything was still under control.  Don’t get me wrong, I was aware I was putting unnecessary expenses on the card – particualrly meals out and food shopping, but always just thought, “oh well, I’ll pay it back no problem”. I continued this way for a few years, making my minimum payments each month but still not yet understanding the balance wasn’t going down.

Time passed and I did start decreasing my use of the cards – my wages had increased and I seemed to be doing OK.  Finally, I’d reached a point in life where I could enjoy a few years of financial stability.  But not for long.

In 1999 a long term relationship broke down.  Looking for new direction I tried make a fresh start by selling the house and moving to a new town. Big mistake.  I was even more miserable and greatly missed my life in the North.  Struggling to make a decision, I tried to spend my way out of unhappiness, which of course didn’t work.  Eventually, I packed up and moved back to Manchester – bringing my baggage with me, all £15,000 worth of debt.  And then?  I wanted to buy a house of course.  I wanted my security back.  A home.

So, I found a house and bought it with a 100% mortgage.  I started spending again – as you do, buying things to make it look “homely”.  By now pre approved credit card applications were coming through thick and fast, and yes I applied for, and got them all.

I thought I was doing OK.  I always made sure I met my mortgage payments.  Time passed and I decided to have the flat roof on the extension changed to a pitched tiled roof.  I took out a £5,000 loan to get it fixed and the payments on that, along with credit card payments meant I was really struggling.  Despite this, I was determined to manage, I’d convinced myself I could.

The minimum payments on the cards were getting bigger.  The loan was variable interest and eventually I was drawing out money on a credit card just to get to work and to feed myself. I knew I had to do something. I was in way too deep.  So, I decided I had to sell the house.

Looking back now, if I’d known about an IVA I wouldn’t have sold.  But I didn’t know, so I did sell – taking the first offer I could.  It helped clear a card or two but still left me heavily in debt.  I then  took a deep breath and approached a council near work for a flat, which I eventually got after a few months of sleeping on a friend’s sofa – and yes, I’d also sold what I could of my furniture and effects.  These were not good days.

Again, like a fool, I found the misery of my self inflicted problems difficult to deal with and the credit cards I’d cleared when I sold the house came into use again.  Before long they were up to their limits.  I was using them to live on and was now approximately £41,000 in debt.

By now, the threatening letters had started to arrive.  I was being bombarded with phone calls night and day, both at home and work.

I knew I couldn’t carry on living the way I was.  I was at a loss.  Searching the internet, I remember I put something into Google along the lines of ‘what can I do about debt?‘ and that is when I became aware of the IVA.  And whilst I can’t recall if I became aware of ClearDebt online or in a newspaper advert, their advertising caught my eye – there were no rash promises made.

After contacting them in early Summer 2005, it became apparent that due to my circumstances, bankruptcy was not an option and an IVA would be an appropriate course of action to tackle my debts.  A proposal was drawn up and even now I remember the feeling of relief – it was immense – that someone could actually help and get me out of the mess I had found myself in.

At the time ClearDebt were based in Manchester city centre.  Not that I needed to, but I decided to go in to their office myself to take the oath, sign the paperwork and put my first payment down.  It was all dealt with efficiently and professionally.

As you can imagine I was absolutely terrified.  This was serious stuff.  Despite my worries, at no time was I made to feel inferior or stupid.

They always treated me like a normal person – no judgments made.

The past was the past – as long as I made sure that’s where it stayed.

As my current bank were one of my creditors I had arranged a new basic bank account in advance so my salary could not be snatched.  In the nick of time I managed to get my employers to pay my first month’s salary (when entering officially into the IVA) into my new account and from that moment I knew my new life had begun.

The first noticeable result of arranging the IVA was the fact that the phone calls and letters stopped.  I truly can’t put intowords how much better I felt about things simply by the hassle from creditors stopping.

Following on from this, the fact I actually had money for food and could afford to travel to work without resorting to a credit card was fantastic.

The first year of my IVA was incident free.  It was  just a case of getting used to functioning without credit- admittedly a strange feeling, but a great one once I realised it was possible. It seemed the first annual review came round so quickly and whilst I was of course worried about the outcome with things going round in my mind such as, “Have I done anything wrong?” or “Have I not done something I should have done?”, all was well and my payments remained unchanged.

As year two progressed I was amazed at how much simpler my life was.  Far less stressful, all due to the IVA.  Sure life was a little dull on occasion, but it was worth it.  Things were much more enjoyable. I can remember having a day out with a friend to Anglesey

and for the first time in many years I felt care free, and able to enjoy myself.

As year two ended and year three began, I couldn’t believe how quickly time was passing. I was nearly half way through – still content and managing with no problems.  It was to continue this way up until the end of the fourth year.  The only hiccup I had during this time was the death of my 19 year old cat which knocked me sideways a bit.

I have to admit, the fifth and final year was one I did find difficult.  I think it was a case of so near, yet so far.  At this stage, my emotions were high and I was keen to start my new life – debt free.  I really wanted my life back.  But the anguish didn’t last long and before I knew it, I was there.  The last payment left my bank account and within the week, I had received my Certificate of Completion.  I can honestly say, hand on my heart, yes it had been worth it, the feeling of elation was incredible.

As someone who has gone through the process of being in debt and taken responsibility for it through an IVA, I can tell you now – if you think you’ll have a similar lifestyle to the one you had whilst living on credit, you’ll be sadly mistaken.  Let’s talk straight here.  An IVA is not an easy option.  But face it head on and you’ll find it a fulfilling one.  Of course it’s hard – believe me,  you’ll have moments of great frustration, especially when friends are going on holiday, or going out for the evening and you can’t afford to – but it’s truly worth it and if you’re anything like me, you’ll quickly become a master on little white lies as to why you can’t  attend various social ocassions!

Please, from someone who’s been there and got to the other end of the tunnel, if you can recognise any of your situation in the above, you should seek help before debt swallows you up.  There is a way out and with suitable back up from a professional firm (and yes I would recommend ClearDebt 100%) you can sort your debts out and like me, look forward to a debt free future.

Regards.

Struggling 63