GDP mediation results in £968,040 of a Debt Write-down

Case Matter:    
In June 2020, a gentleman who was now permanently residing abroad contacted our office regarding some legacy debt that he still owed dating back to the property crash of 2008. This debt included mortgage shortfall debt and credit card debt. Over the subsequent years, this debt issue remained unresolved and our client was put under intense pressure by his various creditors regarding repayment of these liabilities which he simply just could not afford. As a result, our client felt very vulnerable and until he came in to see us he felt that there was no solution to his debt nightmare. Subsequently, he often just ignored this issue in the hope that somehow his debt problem would go away. However, this is never the case with a debt issue and so he came to the realisation that this matter needed to be dealt with head on.

Solution:
During our initial consultation meeting, we discussed the three main solutions to a debt issue. These three solutions are either Bankruptcy, Mediation or an Individual Voluntary Arrangement.  

During our meetings over the following months, we worked with the client to find the most appropriate solution to his debt problem. As he had multiple debts, mediation with his lenders was not suitable as this would have resulted in a very long-winded process with no definite timescale as to when his debt would be completely resolved. Our client also wanted to avoid the bankruptcy option as he was determined to ensure that his creditors received some form of return for the monies that they borrowed to him. As a result, it was agreed that applying for an Individual Voluntary Arrangement was the most appropriate solution to resolve matters. Subsequently, we started to put the wheels in place to transport our strategy into a solution and worked closely with our Insolvency Practitioner partners to ensure that an IVA Proposal could be promptly submitted to our client’s creditors. As there was no disposable income available, in agreement with our Insolvency Practitioner partners, our strategy was to offer the creditors a full and final lump-sum settlement rather than monthly payments over a 5 year period. The funds were being provided from a third-party family member of the client. 

A creditors meeting was then scheduled by our Insolvency Practitioner partners and the creditors agreed to a full and final settlement of £15,000. Our client were delighted with the outcome which was a fantastic result for GDP and our Insolvency Practitioner partners, but more importantly for the client.

Case Study Summary:
Creditor: Multiple unsecured creditors owed £983,040
Proposed Solution: Full and final settlement proposal
GDP Mediated Settlement: Creditors accepted £15,000 (equating to 1p in the £)
Settled: January 2021