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Arrow Global
Case Studies

Case Studies

Research by StepChange Debt Charity (Statistics Yearbook – Personal Debt 2013) suggests that 87% of people who find themselves in unmanageable debt, are in the situation due to circumstances beyond their control.

 

Divorce and relationship breakdown

Debbie is a 27 year old recently divorced mother of two. As part of the settlement, it was agreed that she and her children would continue to live in the marital home.

Before the breakdown of her marriage, her husband paid for the utility and credit card debts as well as shopping and mobile phones, while she covered the interest-only mortgage.

Despite being in full-time employment and receiving child maintenance, Debbie soon found it hard to meet all of her financial commitments. With no savings, she was forced to take out several loans which eventually plunged her further into debt.

Finally, when things became unsustainable, she sought out some help. By contacting StepChange, she was able to discuss her problems and get her life back on track.

Next Steps

If you have recently been, or are going through a divorce, here are some things to consider:

  1. Separation will usually affect your income and living arrangements, which may also affect your benefits entitlement. For more information, visit www.gov.uk/browse/benefits/entitlement
  2. It is possible to get a 'notice of disassociation' if you don't have any joint debts. This will remove any financial link you have to your ex-partner on your credit file. Credit reference agencies such as Experian or Equifax can remove this link on your behalf.
  3. Separation can also be very hard on children. A variety of tools and guides can be found at the Child Maintenance Options website to help you and your children deal with the separation.
  4. If you would like independent assistance, the following organisations are providers of free, impartial advice: National Debtline, Payplan or StepChange Debt Charity.

Loss of job, redundancy or loss of income

Peter lost his job as a result of the financial crisis. At the time he owed money on several credit cards and without the cushion of redundancy or any savings to call upon, he quickly fell behind on his mortgage and utility bills as well.

Before long, he had missed several repayments and, unable to find a new job, he didn't know how he was going to get back on track.

By contacting the Money Advice Service, he was able to seek free, independent financial advice enabling him to set up an affordable repayment plan. He agreed to make payments until his credit card, mortgage and utility bills were no longer in arrears and he is now working towards improving his credit rating and finding a new job.

Next Steps

If you have lost your job, faced redundancy or lost income, you should consider the following:

  1. Start by making a list of all your debts, the more comprehensive the better as it will all help with any financial planning.
  2. Prioritise your list into order of importance. Things like your mortgage, rent, tax and utilities should be classed as priorities.
  3. If you would like independent assistance, the following organisations are providers of free, impartial advice: National Debtline, Payplan or StepChange Debt Charity.

Death of a loved one

Richard and Suzanne were both recently retired and lived together in the same house they bought when they were first married 43 years ago.

Despite making plans for the future, Suzanne's world was turned upside down when Richard unexpectedly passed away. It was only after his death, that she realised his insurance had expired and therefore, she would have to pay for the funeral herself.

Without the sufficient funds available and not wanting to take any equity out of her home, Suzanne turned to a credit provider to pay for the funeral and cover some of the loan repayments.

By the time Suzanne had contacted a charity, she was £4,250 in arrears. She informed her creditors and found that the most affordable way forward was through a Debt Management Plan (DMP).

For more information on dealing with bereavement, please contact Cruse Bereavement Care or Age UK.

Next Steps

If you have suffered a bereavement, here are some steps to help you at this time:

  1. Notify your creditors about the situation, explaining what has happened and that you will be in touch later to discuss the matter further.
  2. Check to see if the deceased person's debts are covered by a life assurance policy (which might repay a mortgage), personal protection insurance or if they are entitled to a 'death in service' payment from a pension or employer.
  3. You may be able to claim bereavement benefits to help ease some of the financial worries you could face. More information can be found at the Age UK website.
  4. If you would like independent assistance, the following organisations are providers of free, impartial advice: National Debtline, Payplan or StepChange Debt Charity.

Drug, alcohol and gambling addiction

For Alex, life as a single 24 year old was great. He was a successful self-employed painter and decorator and after taking care of his bills and rent, he had enough money to go out almost every night of the week.

Before long, however, his drinking started to affect his work, and with his standards slipping, clients stopped calling him back. Initially he took out extra credit cards and small loans to help with his debts, but with his drinking spiralling out of control, he was unable to pay them back.

He even offered to do cash in hand jobs for his friends and family only to spend the deposits for materials on his addiction.

Finally, along with support from his friends and family, he admitted he had a problem and sought out help for both his addiction and debts. By contacting the Citizens Advice Bureau, he was able make an affordable repayment plan for his debts and signed up to Addiction for alcohol counselling.

Next Steps

If you would like more information on addiction, how it can lead to debt and finding a solution, please contact:

  1. Debt Support Trust on 0800 085 0226, contact@debtsupporttrust.org.uk or write to Claremont Business Centre, 112 Cornwall Street, Kinning Park G41 1AA.
  2. Addiction on 020 7251 8560, info@addiction.org.uk or write to 67-69 Cowcross Street, London EC1M 6PU.
  3. Mind on 020 8519 2122, email contact@mind.org.uk or write to 15-19 Broadway, Stratford, London E15 4BQ.4. If you would like independent assistance, the following organisations are providers of free, impartial advice: National Debtline, Payplan or StepChange Debt Charity.

Poor physical and mental health

Sarah is happily married to Rob and they have a little girl together. However, that hasn't always been the case.  Sarah had always been a strong and independent woman, but after giving birth that all changed. With her husband regularly working away from home, she struggled with their new born baby and as a result, suffered from depression.

Not knowing what to do, Sarah started buying things to help her feel better. At first it was only a few little bits every now and then, but it quickly became an expensive habit. Having maxed out her store and credit cards, and not wanting to worry her husband, she applied for a loan.

However, rather than paying off her debts, she continued with her spending. Eventually, when her debts were over £3,500 she confided in a friend what she had been doing. By taking this first step and facing her problems, she found the strength to tell her husband about her depression and debts. Together, they were able to seek the help she needed to tackle them both.

Next Steps

Debt and mental health problems can be caused by a number of things such as redundancy, bereavement or relationship breakdown. You are not alone and there is light at the end of the tunnel. Below are some websites that may be of some help:

  1. mind.org.uk - Information & support. 
  2. nhs.uk - Coping with money worries.
  3. Contact a debt charity, like StepChange  or the Citizen's Advice Bureau, for free expert advice.
  4. If you would like independent assistance, the following organisations are providers of free, impartial advice: National Debtline, Payplan or StepChange Debt Charity.
Arrow Global Limited is registered in England and Wales with company number 05606545. Its registered office is at Belvedere, 12 Booth Street, Manchester M2 4AW. Arrow Global Limited ("AGL") is authorised and regulated by the Financial Conduct Authority for certain credit-related regulated activities, and is part of the Arrow Global Group. AGL is registered on the Financial Services Register under registration number 718754.