£300,000 business debts cleared with an IVA
Paul wound up with a lot more debt than most people rack up on their credit cards. But the £300,000 he owed was primarily a result of debt he had taken on to finance his business, a music recording studio.
Though the studio had once been extremely successful, the loss of a key client and disputes with his business partners led to its eventual receivership in 2001. Paul was left holding enormous debts to a range of creditors, many of them on personal credit cards.
“I’d lost my business and was up to my neck in debt – I didn’t know where to go for help,” says Paul.
Paul’s accountant put him in touch with 20-year IVA expert Phillip Allen because he’d seen other clients complete successful IVAs with Phillip’s team. “At the start, I didn’t even know what an IVA was,” says Paul. “And once I found out, it sounded terrifying!” But Phillip Allen walked him through the process and managed to get all his creditors to agree on a manageable plan. “Getting 75% agreement from my creditors was a close-run thing because of the complexity of my situation. Phillip used his long experience in dealing with creditors to figure out a way of reaching agreement – the result was fair to my creditors and manageable for me.”
Paul admits the next five years were hard. He even missed occasional payments which then had to be made up on subsequent months. But Paul says his IVA advisor “held my hand” throughout the process, securing payment holidays for those times when he just couldn’t get the money together. “It was never an impersonal thing – he continued to support me during the entire five years of the IVA arrangement,” says Paul.
Paul won’t go so far as to say the IVA was a positive experience for him (he says the episode is best expressed by the Bob Seger lyric “I wish I didn’t know now what I didn’t know then”), but admits it taught him a lot. And he was taken aback by the sense of euphoria he experienced when he finally paid off the debt. “I paid it in on the Tuesday and the cheque cleared the following Monday. I just felt this huge relief – I may not have any assets, but for the first time in my adult life I don’t owe anything and that’s just great.”
For free advice from an IVA expert about solving your debt problems call Debt Lifeboat now on 0800 917 3328
