Archive for the ‘letters’ Category

Twenty Thoughts for Debtors

November 23, 2008

In an entertaining but astute article in , The Financial Times Weekend Magazine, David Gaffney offers a trawl through some dos and don’ts and a couple of misconceptions.

He has written a novel Never Never based on this, and as you would therefore expect, he has a keen ‘eye’.

First he cautions against the ‘all the eggs in one basket’ approach to controlling spiralling debt. And warns not to borrow one’s way out of trouble. Perhaps he should have a word with Dear Gordon?

When you owe a lot, some arrangements can involve very tiny paybacks, and ‘geological’ payback periods. Gaffney says the first time he explained this to a client it was not well received! His bedside manner has improved.

Bailiffs seem a tricky area, but the main rule is not to let them in! Though of course the court-appointed bailiff is a different matter. Once in they are entitled to take inventory and return for collection of those goods.

He points out that creditors are keen to move as much of your money to them as they can possibly argue you should, while your task must be to hold on to all the money you need to live decently. And that – as a debt counsellor – he had no principles about his attitude to them. they will survive, and so must you, the debtor!

While he has some understanding of borrowing from one card to pay off others he says it is hard work and maybe it is a lot easier to stop. Strangely he found most multiple debtors were jolly, not my understanding at all. While bankruptcy costs.

He has several warnings about ways to avoid debt, such as being careful who you buy Christmas hampers from and ways of saving money on electricity.

Let me say he is a very witty writer and his explanation of the way judge’s are sympathetic to debtors is a good example, including that it might not be a good idea to wear clothes which are part of the original debts before the court.

He points out that credit companies want you to owe them money, which is their business after all. It is the paying back bit that can get complicated. And hire purchase goods cannot be taken back! Let me add that it is not a good idea to do this deliberately.

Among his clients have obviously been some ‘professional debtors’ since he suggests never being available to creditors or their agents since if they are unable to contact you for six years the debt lapses. Though the rule is not absolute, and would apply only to non-priority debts. (there are very few priority debts which include revenue taxes, council tax, rent, mortgage and utility services payments, and not much else)

But if you own your house his no 16 is ‘You can lose your house if you don’t pay’. Be warned! As I always emphasise being honest is the best approach.

One thing is very important. One that I have seen rarely mentioned. ‘Beware,’ he says clearly, ‘those creditors who sent measured and polite threats.’ Because they probably mean it.

It is possible to end up with someone else’s debts, so don’t accept delivery of something you don’t know about. It may carry a big burden of someone else’s unpaid debts.

He ends on a note of grim faced humour…

’20 Life is beyond some people’s means

‘A debtor is someone who hasn’t got enough money for the lifestyle he or she chooses. Most frequently this is a lifestyle most people call normal life – like having a phone, a telly, some clothes, heating the house and running the water. What should we do, kill them all?’

Joseph Harris
Debt Control Man

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Matching Debt Repayments to the Budget

September 4, 2008

A vital part of the process of contacting creditors to negotiate a new arrangement is the income and expenditure statement. They need it to assess what they can ask for and you need it to assess what you can afford to pay.
Usually you will receive a budget form from the company. My advice is ignore it. Not the need to present a completed form, but the actual form they send. The reasons for this are many, among them the fact that each company has its own layout, and none are about you; they are about the company!
Now more important is the fact we are facing difficult times. Living costs will inflate for some time, and it is likely that incomes will decline. A squeeze.
So long as you describe your needs clearly in this income and expenditure account it will provide the essential and accurate point for discussion.
I favour this accompanying your second letter, when you have had time to review all your affairs carefully. It might be worth setting it out roughly and putting it aside to come back to for review and correction. When you finally send this off it is vital that you have all items of expenditure included.
This is the 21st century; you are expected to continue to live without starving and without being homeless. In pursuit of this there are certain priority debts and payments. These must be deducted from your income before any attempt to assess what you might be able to pay towards settlement of non-priority debts.
If this gives a debit position—in other words if you need more money than you have to meet your needs then your creditors cannot expect payments.
As you investigate further you will learn of the options for managing your position: IVAs, bankruptcy and so on, and be told about bailiffs and court action. Court action—which rarely happens—will in any case be a long way down the road, and bailiffs can only be involved after court action.
You have research to do of course and trying to work out your personal best course of action. As you seek advice as well you will probably find your first fears recede, and options which you can handle with little discomfort becoming realistic.
That is exactly what I found. Because those who might have been intermediaries gave me advice that was not very sensible for me and made hashes of the figures I gave them I determined that it was up to me. And I am glad I took the step to control my debt crisis on my own terms.

Your Debt Crisis, Making Notes

August 26, 2008

I don’t know anybody that really enjoys the nature and the discipline of making notes. And I most certainly include myself. But, in my view, notes you must make.

Unless you manage to come to a very quick agreement the debt negotiation can take months. I have four accounts entering their sixteenth month, and set fair for a few more. Don’t worry if they take time.

What is important is to realise that you cannot commit all that is happening to memory. Your memory is probably better than mine, but can you remember a phone call you made six months ago? Unless you are a rare person with a photographic memory I doubt it.

In negotiating for a settlement to your debt you will be approached by phone and by letter. Each time a record of some sort is placed on your computer file.

But will it be the same as what you believe took place? You won’t know; no-one is going to tell you. But your creditor will use that record to judge you, the debt, and how he wants to pressure.

So you must make a full note of the conversation. You can have pen and paper ready by the phone. Or ask the caller to wait while you get them, or get the file you have on that particular creditor.

And what should the note say? First the name of the caller, the company, and if it is not the original creditor the the name of that one. The date is vital, and the time of the call is important.

It is also a good idea to ask where the caller is based. The conversation will go differently if you are being called from a call centre in Bangalore, than if you are being called from one near your home.

You can interrupt the conversation to make a full note if you feel you need to. Sometimes a statement by an agent is so outrageous you want to make sure that it is recorded in full. The agent at the other end is making notes, and the conversation is also being recorded that end.

You are fully entitled to have the time to make your own notes, even to make your own recording if you have the equipment and the know-how.

If the creditor’s agent does make an outrageous statement you need to follow up with a complaint to a superior. This is best done in writing, since it makes a record that must be responded to. And it is available for the FOS or other third party to read and understand the failings of the creditor.

Recently, in a debt case before the FOS, I had a creditor pass the debt to a debt collector. I phoned the creditor and first received a helpful response and a promise of a return call. The young lady who returned the call refused to contact the FOS to confirm that the case was before them.

I now have a rather apologetic letter from the office of the Chief Executive Officer of that organisation. And I wrote to both the FOS and the Office of Fair Trading informing them of this failure.

How do you think the FOS will view that creditor when dealing with my debt case? And how will the organisation be viewed with other cases that go before it? And how will that look on the file of the Credit licence of that organisation at the OFT?

You have power to defend your position. Use it.

Joseph Harris
Debt Control Man

Posting Your Debt Letters

August 22, 2008

I am very keen on writing letters. I think it is much easier to make your points clearly and get them across. Also it is by far the best record you can make of your debt experience, and how your creditor is behaving.

But it has just been brought home to me that delivery of those letters is equally important. And this is because of an experience I am in the middle of.

In the afternoon of August 12 I sent important papers related to a debt by Recorded Signed For from our local sub-Post Office. I was assured that this would go with the Royal Mail collection man who was bustling around at the time.

It is some time since I used recorded delivery—as it used to be known—and then it cost 88p and I was able to track the course of its progress online, and it was delivered by the third day.

This time I paid £1.50 and online only reveals when it has been delivered and signed for. I am still getting “Come Back Later”, and today is August 22. As a comfy ride for Royal Mail you cannot query its delivery until 20 working days have passed—which in this case means September 1.

Normally, for cost reasons if nothing else, I sent letters—debt or otherwise—by straight first or second class, according to my sense of urgency. I cannot think of one that has not been reliably delivered, and usually within one, two or three days.

I am quite convinced now that this is lost. And, one other sign of Royal Mail’s self love and contempt for its customers; you cannot contact a live human being in the operation. Usually when something like this happens I write to the Chief Executive Officer and complain to the Office of Fair Trading.

But I will have to wait a bit longer before anyone will listen to me. Lucky it wasn’t done because of time constraint. But when the importance is to be sure it arrives this kind of service seems to me the very worst of what British is all about.

So, while I might have recommended using this signed for system for really important papers, I cannot recommend it any longer. Especially not when some aspect of your debt negotiations has serious time constraints.

Within a realistic price structure I do not know of any alternative way to be secure in the knowledge of delivery. I would say it is worth checking with the recipient.

But then again the big creditors have two problems for debtors. First I have found that the internal distribution service can hold mail up for a week. Second it is not easy to know where the letter has gone to unless you have addressed it to a named individual.

So I can now say with some certainty that I will in future be sending my mail by ordinary post, and my best suggestion to you is that you do the same.

Joseph Harris
Debt Control Man