Trish was referred to us by another company as they could not offer her a Personal Insolvency Agreement (PIA). Not many companies can offer PIAs as they need a Registered Trustee on site to provide the service.
Here at Debt Free we have a Registered Trustee on site to provide these services.
Trish had debts of approximately $130,000 which meant she fell into the category of a PIA.
Trish told us that her debts accrued when her husband was out of work and they relied on credit facilities to meet their everyday living expenses. It had gotten to the stage where Trish was unable to maintain the repayments and she was getting constant phone calls from the banks and credit card companies. Being a shift worker, it was literally disturbing her sleep and she was feeling a huge amount of stress.
We worked through her budget to try to arrange for her to offer her creditors about 60% as a settlement. We then discovered that her husband also had a similar amount of debt in his own name. As a result we suggested that they offer a joint PIA to their creditors. Between them they had about $260,000 in debt, which is a large amount to pay back even at a reduced amount, but bankruptcy was not an option for them as they desperately wanted to keep their house.
We came up with a plan whereby they repaid approximately $2,500 per month for 5 years. This offered their creditors a return after costs of about 53%. We usually aim to offer at least 60-70% however that wasn’t possible in this case. As it turned out, one bank said no, but because the majority said yes it was accepted and now all creditors are bound by the PIA.
They now both have legal protection from their creditors and a foreseeable end to their crippling amount of debt. So long as they maintain their mortgage and PIA payments they do not have to worry about losing the family home, as no unsecured creditor is able to make them go bankrupt whilst they are in the PIA. But most importantly for Trish and her husband, the phone calls have stopped, and they can now rest easy.