Normally the financial institution(s) who you’ve had financial difficulties with will give you up to 6 months to get everything back on track. 

If after this period things are still no better then the debt is passed over to a credit collection agency. You may already know some of them e.g. Blair, Oliver & Scott or Career Development Finance.

I have found it rare to be notified by the financial institution that the debt has been passed across.

Normally, the CCA’s will contact you in writing to advise you that they have now taken over the debt. It is best to call them to discuss/confirm payment options. They will normally request you complete a financial statement that details all your income & expenditure. 

A word of caution – some CCA’s will ask for further information such as payslips BUT do not agree to this!! All the CCA’s are entitled to is an income/expenditure sheet and no more!! These are just some of the scare tactics used by some (but not many thankfully) of the CCA’s around.

Once you have agreed your weekly/monthly payment with the CCA make sure you ask them to confirm the agreement in writing. I would also advise that you always follow up any phone call to the CCA with a letter confirming any agreements made during said phone calls and always ask the CCA to confirm in writing anything the agree/request with you.

I know this sounds a little over the top BUT trust me when I say you’ll if you don’t do this and find yourself at odds with the CCA then you’ll find it impossible to prove you are in the right without evidence!! 

Stick with the above and you’ll do ok. If you have any questions on debt management or would like any advice then please let me know.

Regards

Alex Fyfe.

The first thing I did was contact each of the creditors and provide them with an up to date copy of my income/expenditure plan and a covering letter which included my offer of payment. The payments offered were a little higher as they each included a percentage of the management fee i’d previously been paying the debt management company.

Luckily, the creditors accepted this but did state they would request a review of my plan on a 6 monthly basis.

I set up standing orders with my bank and created a spreadsheet (debts.xls) which detailed the amounts owing to each creditor on a reducing monthly basis.

Payments started to go through and all was well.

Then the phone calls started….

Halifax (credit card) started to ring asking about increasing payments and how much was outstanding on the debt. Despite advising them that I had an agreement in place the person on the phone never seemed intrested. Even on the occasions when I was told that i’d received no more calls they still came!!!

In the end, I advised the next caller that their continued harrassment of me by telephone put them in breach of Section 40 of the Administration of Justice Act 1970 & the protection from Harassment Act 1997.

I then wrote a formal letter of complaint (halifax-credit-card-complaint.doc). Within a week the calls ceased and to this day I’ve never received one call!!     

Next time I’ll go through what happens when a debt is passed from a creditor onto a credit collections agency.

Take Care

Alex.       

Not knowing what to do i fell into the trap of contacting a debt management company I’d seen on television.

They sounded knowledgeable and promised to reduce my monthly payments and save me dealing with all those nasty creditors.

GREAT!!

Or NOT as I found out!!!

Companies of this nature who advertise on television or in the newspapers normally aren’t that bothered about you or your financial issues. 

Sure, they’ll start off by helping you to fill out a debt management income/expenditure plan and advise you what you’ll be paying to each of your creditors & some will even post this information off to the creditors for you.

The first problem is that the creditors will still chase you directly via phone calls and letters. I ended up contacting creditors continually advising them to contact the debt management agency (as they’d told me to) quoting a contact number and reference code.

However, in most cases the creditors ignore this stating that they do not deal with debt management agencies or that they’ve never received any paperwork!!  When I advised the debt management agency of this they would only advise that they would resend the payment offer to the creditor in the post. Not really that helpful!!!

The second issue is that most of these agencies will charge you a management fee for dealing with your account which reduces the already small amount of cash you have available each month to pay off your debts.

I decided that instead of paying them a fee I could deal with the creditors myself (as I was already doing) and thus increase the monthly payment offer.

I’m pleased I did!!

More soon….

Alex.

Start working on your budget to find out what you ‘re income and expenditure is. Please use this excellent Budget Planner which will help you work out where your money is going. 

If you have any questions then please ask.

Alex Fyfe

Borrowing more money to get out of debt OR “out of the frying pan & into the fire” 

Most people would advise that to borrow money to pay off debts is a bad idea and generally I would agree. However, If it’s possible to raise funds at a cheaper rate to replace existing borrowing, then this will mean lower interest rates mean more of your cash goes towards repaying the actual debt rather than just servicing the interest. Those with big debts may save thousands a year in interest by being more sensible with their borrowing.

Talk to the people you want to hide from….

When you accept that you’re in debt most people will hide from their lenders!!!

I cannot stress how important it is to get on top of debts as soon as possible. Do no’t default or miss payments.

Contact your lender as soon as possible and let them know if you’re going to be unable to pay. It’s always better to talk to them although measures such as reducing interest, expenditure are the best course of action.

More soon…

Alex. 

In my opinion being in debt is when you cannot afford to make the minimum repayments on all your debts and still meet all your weekly/monthly outgoings.

No matter how bad your debts are or how bad you think they are there is always a way forward.

The main point is that you accept that you are in debt and start to deal with them. This will make you feel better and more in control of your finances.

If you’re wondering how bad my debts were then they totaled £59’915!!!!

Dealing with debt

When I first sat down to fully work out how bad things were even I was shocked by this (large!!) amount. The one thing that worried me most that I did not know where the debt came from. 

After weeks of investigation I found that I had overspent on credit cards and bank loans to cover the difference between what I spent and what I earned. If this describes you then it’s time to STOP and take stock of your income and expenditure!!

Remember – You’re not in debt because you want to be. Debt comes from spending money you don’t have. You need to take control of what you are spending. Within this blog I will outline basic methods that helped to save me money and how to cut back where needed. It’s not rocket science it’s just you need to be honest with yourself. No matter how bad you think things are there is light at the end of the financial tunnel.

More soon…..

Alex.

Ever been in debt??

In debt at the moment and worried that you’re in over your head??

Well I know it sounds easy to say but DON’T WORRY!!

Stop for a second and take a deep breath…….

I was in that same position six months ago and had no idea where to turn or what to do.

Over the next few days I’ll explain what I did to aleviate alot of the stress and tension that comes with being in debt (a large one I may point out). 

Take Care…..