Eastenders’ Peggy Mitchell has found herself in terrible financial trouble, a situation which is not that different from that of millions of people across the country.
The credit card at first seemed a handy way of treating herself to something nice, but the spending soon got out of control and suddenly she finds herself with £40,000 worth of debt and the bailiffs are knocking on the door. R3 – The Association of Business Recovery Professionals, frequently sees similar problems.
What should Peggy do in this dire situation and where can she go for help? The first thing anyone in this situation should do is seek expert advice.
Peggy has buried her head in the sand, but now she has to face up to the consequences of her over borrowing. She should contact a licensed Insolvency Practitioner, who can advise her on what the options available to her are and how she can begin to resolve her debt issues.
R3 Council member Peter Sargent says, “The worst thing you can do in this situation is ignore the problem and hope it goes away. It never does. The longer you leave it, the worse it gets.”
In this case, it is likely that an individual voluntary arrangement (IVA) would be the most appropriate option. Peggy’s debt is too large for her to be able to pay it off quickly and if she goes bankrupt she will lose the Queen Vic, as all her assets will be sold to pay off her creditors, which will include the bank and credit card companies she owes money to.
An IVA is a legally binding arrangement between a debtor and their creditors, where the debtor agrees to pay back as much of the debt as they can afford over a set period of time, usually five years. An Insolvency Practitioner puts together a proposal in which he/she lays out a plan for repaying some of the debt, and the creditors can either accept of reject it. Once it has been accepted it is legally binding for both debtors and creditors. The advantage of this option for Peggy is that she will be able to keep the pub, although she may have to use some of the equity to pay the creditors.
Peter adds, “It may not be pints all round, but at least Peggy will keep a roof over her head and her livelihood. In some professional event today if you go bankrupt you can lose your job. Worrying about debt can be very stressful, so it’s important to get professional help and soon.”