IVA Case Study
 
Marion and David were both working in full time jobs. Marion was a Travel Agent, and David worked as a Recruitment Consultant. Together, they brought back around �2500 per month. They saw credit facilities as useful ways of getting goods up front, and they never had any problems managing repayments.

They had a store card, two credit cards and a personal loan, which had been used to buy a car. In addition, they were making mortgage payments. But they never ran into any difficulties meeting these. They enjoyed a reasonable lifestyle � going out with friends, eating in restaurants, and at least two holidays a year.

Their financial difficulties began when they had their first child. Marion minimised her income gap by working until the last minute � she began her maternity leave only 2 weeks before her child was born. However, it was a complicated birth and Marion ended up spending several weeks recovering in hospital. Her income fell to statutory maternity pay.

This meant that the monthly household income was reduced by �600. In addition, David had to take time off work to look after her and the baby in hospital. To make matters worse, the day-to-day costs of petrol and parking in the hospital car-park put them under extra financial strain. David decided to supplement their income by using credit cards. He did not feel that there would be an issue with repayment as he believed that Marion would return to her full time job. The credit cards were merely a convenient way to see them through � a stop-gap measure.

However, due to complications with her health, Marion was only able to go back to work part-time. This meant that money was extremely tight, especially now that there were additional child minding costs and an extra mouth to feed. Things started to spiral out of control. For the next 18 months, Marion and David tried to juggle their debts by taking consolidation loans.

However, every month they were forced to rob Peter to pay Paul and soon their monthly repayments increased to more than �900 � way more than they could ever possibly afford. Something had to be done to stop the situation from getting any worse. They began to fear that they were heading for bankruptcy � and Marion in particular felt that she couldn�t cope with losing the house.

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