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Debt Help Case Study: A Debt Settlement Arrangement

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A Debt Settlement Arrangement

debt settlement arrangement

Michael and Noreen are struggling to pay their unsecured debt of €35,400.

 

Michael and Noreen owe €35,400 to their credit card companies and are struggling to pay €750.00 a month to their credit card debt because their income has been reduced.

 

They have 3 children and are finding it very difficult to pay all their bills as Noreen is unable to work now due to a long term illness.

 

Noreen used to work full time but now she only receives benefits so the couple cannot afford to make the normal monthly payments to their credit cards as their household income is a lot less.

 

They tried to negotiate with their creditors but the credit cards companies would not reduce their payments for them and are adding interest to their debts.

 

Their creditors keep phoning them and are sending them debt collection letters every week asking them to make payments they cannot afford.

 

Michael and Noreen know they need help so they speak with a Personal Insolvency Practitioner about their debt problems.

 

They sit down with a Personal Insolvency Practitioner and he offers them Free Debt Advice, he goes through all their income and expenditure details and recommends a Debt Settlement Arrangement (DSA) as the best solution to help them become debt free after 5 years.

 

The Personal Insolvency Practitioner applies for a Protective certificate first which gives Michael and Noreen protection from legal proceedings by creditors while they are applying for a Debt Settlement Arrangement.

 

This gives their Personal Insolvency Practitioner time to get all their paperwork together so he can make a proposal to their creditors. A couple of months later the Personal Insolvency Practitioner calls a creditor meeting and their creditors agree to the proposal put forward by their Personal Insolvency Practitioner.

 

Their Debt Settlement Arrangement has been approved and they will only have to pay their debt back for 5 years. Their new monthly payment towards their credit cards is €300.00 and €17,400 of their debt will be written off.

 

They won’t receive any more letters and calls from their creditors and will be able to sleep now as they are not going to be worried about their debts. Their Personal Insolvency Practitioner will manage their Debt Settlement Arrangement for them until their debts are paid off.

 

An Example Of Michael and Noreen’s Debt Settlement Arrangement

 

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(This is an example of how a Debt Settlement Arrangement can help someone who is insolvent, the monthly payment and the amount of debt written off in each debt settlement arrangement varies for every insolvent person/family as everyone’s circumstances are different, this case study is just an example and will give you an idea of how a debt settlement arrangement can help someone struggling with unmanageable debt)

 

A Debt Settlement Arrangement is a formal agreement between you and your creditors where you repay a percentage of your debt and your creditors agree to write off any outstanding debt.

 

If you are struggling to pay your unsecured debts such as credit cards, loans and overdrafts then a Debt Settlement Arrangement could be the right solution to help your clear your debts with affordable payments.

 

A Debt Settlement Arrangement is an agreed settlement of your unsecured debts (credit cards, loans and overdrafts) with affordable payments over a period of 5 years.

 

When a Debt Settlement Arrangement is successfully completed you will be fully discharged of the debt included in the arrangement and will be solvent again. You must contact a Personal Insolvency Practitioner to apply for a Debt Settlement Arrangement

 

If you would like Free Debt Advice then let us arrange a FREE appointment for you with a Debt Advisor or Personal Insolvency Practitioner. There is no charge to speak with a Debt Advisor or Personal Insolvency Practitioner and anything you discuss is kept strictly confidential.

 

If you are struggling to pay your debts then contact us today on 01 4434125 and find out for free if you qualify for a Debt Settlement Arrangement.

 

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Rory McGonnell

Founder of Bright Day Finance

Personal finance expert and blogger who has an interest in money saving ideas.

 

 

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