My Personal Debt Story

How An IVA Saved My Life

Dear Friend

My name is Peter and I'm one of the co-founders of IVA.info.

For the past 15 years or so, I have been helping people rid themselves of their debt problems and for the first time ever, I have decided to share my own personal debt story with all our visitors in the hope that it may help.

It’s always hard baring your soul about being under piles of debt pressure. After all, we’re all brought up to see being in uncontrollable debt as a shameful thing, but it’s even worse when you know it’s not really your fault.

I got into serious financial difficulty about 11 years ago. I didn’t know what to do. Then I heard about IVA’s – a government scheme designed to help people avoid bankruptcy.

I went through an IVA and it, almost literally, saved my life.

I was so fascinated by the process that I became an IVA adviser myself and have since helped thousands of people get out of debt.

Everybody’s story is different. This is mine…

The family business

I left school at sixteen and like most teenagers I didn’t really know what I wanted to do as a career.  I had thought about being a joiner as I had enjoyed doing woodwork in school but something was nagging at the back of my mind that I wanted to be in business.

I was fortunate my father had followed in his father’s footsteps by continuing the family retail business as he invited me to start working for him whilst I decided what to do.

Chris, Dad and Me

Me (on the right) with my Dad and brother Chris

Ten years later and with probably one of the most testing apprenticeships known to man, I decided to leave the family business, to take the plunge and begin working for myself.

Working for myself

I started modestly enough with a stall at my local market and steadily built a business that eventually allowed me to support my first mortgage.

After three years I was still not satisfied that I was working to my full potential and so I decided to join forces with a fellow trader and do something more challenging.

We found an old derelict mill on a local industrial estate and six months hard work later we opened our Cash & Carry warehouse which was open to the public (providing they had a membership card to get in).  We spent seven days a week, and sometimes even all night, building the business with all its ups and downs, through thick and thin, developing a concept that is now commonplace, the most common version being Matalan stores.

Business was brisk and we truly believed we had found a market niche.  People used to travel miles for a bargain.  Our car park was always full, especially on Sundays, as in those days stores were not allowed to open on Sundays, (hence our membership scheme), which meant we had a lot of trade all to ourselves.  We were both extremely proud that from nothing we had turned an old mill into a business that employed an average of fifty staff that all helped generate a very respectable turnover….. and a modest profit.

Then disaster struck

Notice of Closure
Notice of Closure
click to enlarge

However, in December 1997, two weeks before Christmas, disaster struck.  We received a letter from the local Council informing us they were serving a ‘Notice of Closure" on the business and unless we wanted to appeal against the action the business we had been building over the previous seven years would have to close down no later than the end of the following March. 

This had all come about when a neighbouring trader began retailing from their unit without proper Planning Permission.  The local Council took the trader to Court and after a long battle the trader lost the case on appeal.

As a last throw of the dice the trader managed to persuade the judge that it was unfair to rule that they were the only business to be forced to stop trading and, as a consequence the Court Ordered the Council to serve closure notices on all of the business’s trading on the estate, including ourselves.

Devastating

Needless to say this was devastating news and we immediately sought legal advice from our lawyer.

Our lawyer said he could represent us but he was worried that the style of trading we had adopted i.e. our membership scheme was a grey area that he thought might fall foul of the Cash & Carry planning permission we had.  He said that taking the Council to Court over a planning dispute was, at the best of times, extremely time consuming and expensive and when you added the style of trading we had adopted to the equation, he wasn’t convinced we would win.  His fear was that we would more than likely run out of money before the case was ever concluded.

Hobsons choice: Doing the right thing

All of our money was earmarked for staff wages or tied up in stock, which meant that even if we did use it and won our appeal, we would be left with no staff or stock to trade with.  We were faced with ‘Hobson’s choice’.  Do we lose the business trying to defend ourselves or do we close the business in a controlled and responsible manner?

After hours of frustrating discussions we eventually came to the decision that we had no other choice other than to close the business down.  Whilst we were disappointed about our decision we new that we had to do things properly as we were a limited Company and therefore we had a duty to do so. 

My first encounter with an Insolvency Practitioner

Our accountant advised us to appoint an Insolvency Practitioner to put the Company into voluntary liquidation and with their help and with the help of our families and some loyal members of staff we held a successful closing down sale. 

Fortunately the business was well stocked and the sale proceeds, give or take a few pounds, paid off the business’s creditors.  The bank was satisfied our personal guarantees had been met and returned the deeds for our respective homes.

After we had sold the fittings all we were left with was an empty building.  We thought that under the circumstances we had done everything we could and that the only problem now was how we were going to earn a living.

But worse was yet to come…

That’s when the stuff hit the fan....... We thought we had done the hard part, closing a business that had been such a major part of our lives over the past seven years, losing our dreams of success and financial freedom...... How wrong we were!!

Enter our landlord.  Two years earlier we had signed a new ten-year lease, based on the success of our first five years and in the opinion that if we signed a longer lease we would get a better rental per sq ft and therefore strengthen the business’s overall position.

Well that may have been the case had we still been trading but when we approached our landlord with our problem he explained it was just that… our problem.  We had both signed personal guarantees and therefore, he was entitled to his rent and was expecting it to be paid on time as usual.

Fear of the dreaded CCJ…a financial outcast!!

Neither of us wanted to default on paying the rent and we were left in no doubt that if we did then the landlord would take us to Court and we would each end up with a CCJ against our names.  Looking back it seems strange that having gone through a voluntary liquidation the fear of a CCJ still scared the living daylights out of us. I think the psychology of having a CCJ, makes you feel like a financial outcast with an un-stoppable fear that you may never be able to get credit again.

The landlord said he would try to find a new tenant for the building so my business partner and I both agreed that we would share the rent until the land lord had managed to sub let the building to a willing tenant, after all, it wouldn’t take that long, would it? 

Back to basics to make ends meet

We agreed to split up so we could go and find work to cover our own living expenses.  I ended up back on a market stall as this was where I had come from and was the best way of getting relatively quick money without to much expense. 

Whilst I managed to make a living it was nowhere near the amount that I needed to cover my share of the rent so I started to apply for credit cards.  I now know that this was a big mistake but at the time I wasn’t thinking straight, I was scared and was letting things that seemed important influence my judgement. 

Judgement Letter
Here's my CCJ
click to enlarge

As long as I could get credit then I was going to take it, as it seemed a better option than having to face my fears of a CCJ and the loss of pride in letting my partner down.

Eighteen months later the building was still not let, I had run up a huge amount of credit on a number of credit cards and what little money I had received from the sale of my flat had all but gone.  I longed for the day that the building was let so that I could at least try to sort myself out on a level playing field.

I kept telling myself to be positive as things would work themselves out but the longer the situation went on the more I realised that waiting was not the answer. Then one day it suddenly dawned on me that the landlord wasn’t exactly falling over himself to find a new tenant.

Why should he?  He’d got us and we were still paying the rent. 

Hitting rock bottom – I had to take action

It was at this time that I decided that I had to take action, all my resources had gone and I needed help.  I had hit rock bottom, I had lost my business, my relationship with my girlfriend was over and I couldn’t manage to let the empty building no matter how hard I tried.  I was feeling extremely low and I couldn’t see a way out.

Thank god for my family

Fortunately, I was able to stay with my parents, who were, and still are, a great support to me and to whom I will be eternally grateful.  You know it is surprising, you don’t realise how wealthy you really are until you have nothing.

My brother knew of my predicament and he had given me the number of a company that had helped one of his friends out of debt. I had nothing to lose so I gave them a call and arranged a meeting at their offices.  I was a bit sceptical about the meeting as I couldn’t understand how they could help me and, without putting too fine a point on it, make some money at the same time.

My life would change as a result of what I was about to learn at that meeting.

I was told of a procedure called an Individual Voluntary Arrangement, otherwise known as an IVA, and I must admit that at first it sounded too good to be true.

The meeting lasted no more than an hour and they explained how this was a way to get me out of debt and that mine, like the majority cases, would even allow me to write off some of my debt!

Having listened, and although I was not there yet, I was convinced that this was my way out debt. Driving home after the meeting I felt that an enormous weight had been lifted from my shoulders.  The only down-side was that I now had to go and tell my business partner that I was no longer able to pay my share of the rent.

Understandably, he was not happy as he was convinced that if we stopped paying the rent that he, unlike myself now I was to do an IVA, would still be exposed to the possibility of being issued with a CCJ.  Nevertheless, he understood and accepted my decision.

Necessity is the mother of all invention

However, there was some good news: Having had time to think of alternatives for the buildings’ use, I had done some research on self-storage and I suggested that he might want to develop the idea.  He took the opportunity, agreed to pay the rent himself and six years later he has five thriving self-storage warehouses with ambitions for more to open.

With the rent issues sorted out I was then able to concentrate on clearing my credit card debts through my IVA. I am happy to report that this was concluded to the satisfaction of both myself and my creditors. 

You may wonder why I have not gone into the details of how much I owed and how my IVA worked for me.  Well the reason for this is that each IVA case is tailored to suit a person’s individual circumstances and as such my IVA is not relevant to the next person being able to do one.  All I can say is that without this opportunity I fear that I may have ended up declaring myself bankrupt which is the last thing I wanted to happen.

I realised that I could use my experience to help other people

Having gone through the whole experience I realised that I could help other people who were in debt and who might be going through similar circumstances to those I had been through, so I approached the people who helped me and asked if they had a job for me.  To my delight they said that they had and so once again I decided to leave market trading and start training for my new career.

I knew the day that I started work that I had found something that I really enjoyed doing and it soon became apparent that I could use my IVA experience to make a difference to other people who were going through the same misery that I had been through. 

Starting my own business again

It was six months to the day when I resigned my position.

Once again my entrepreneurial spirit had got the better of me. I was enjoying what I was doing so much that I had decided that I wanted to start another business.

We’ve now helped thousands of people enter into an IVA

Over the last fifteen years, with the help of my brothers and the carefully selected staff who have joined us on our journey, we have advised thousands of people on how to enter into their own IVA.

Lots of things have happened since the dark days where I just couldn’t see a way out of my dilemma.  I have been extremely fortunate to find a career that has allowed me to fulfil all of my ambitions, whilst at the same time giving something back in the process.

Me and Karren

I have also met a beautiful girl who, like my family, never ceases to support to me.

There is no debt situation we cannot help with

Having done an IVA myself and having helped set them up for many other people, I can tell you that even though you may think that your problem is not solvable there is no situation were we cannot help. 

In the end it may not be an IVA that is the solution to your problem but if you contact us we will endeavour to find the right solution for you as I can guarantee there will be one.   

Yours sincerely,

Peter

Peter
Co-Founder, IVA.info

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