BAD NEWS SELLS PAPERS: BUT RADIO PROGRAMMES TOO?

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Please indulge me, dear reader, if I take a short canter on one of my favourite hobby-horses. We all know that the thing that best sells newspapers (after sex) is bad news. I once listened to a media consultant speaking at a conference here in Bristol, saying: “News is what somebody, somewhere, doesn’t want you to know. Everything else is advertising.”

OK, so newspapers have to be bought or the publisher will go bust. (alongside “bought”, you can now include subscribing to a website pay-wall, in the case of the Times group of papers). If we complain, as I often do, about the relentless sensationalism of which our media is so fond, the remedy is in our own hands: don’t buy that particular paper.

What really gets my goat (Why “goat”? Answers please!) is when the same policy is adopted by the BBC, which, the last time I checked, is funded by licence fees.

The thing that got me going was just a snippet and I am not even 100% sure of the motivation of the presenter in this case … but I can make an educated guess. The subject was, I think, the London Olympics.

Presenter: “what do you think of these recent rule changes?”

Interviewee: “I am sure that the people who are responsible for those rules have made the changes for a good reason, so it’s up to us to get on with it.”

Presenter: “That’s a very diplomatic answer.”

(Presenter’s thought-bubble: “Rats! No controversy? Very disappointing answer.”)

OK, the presenter’s actual response to the answer was spoken softly, in the very polite voice that particular presenter always uses for her most penetrating questions. I could be adding two and two and making 57 … but I doubt it.

ANALYSING YOUR FINANCIAL SITUATION

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A few years ago, when severely in debt, I avoided opening letters from banks and credit card companies. So I couldn’t begin the process of getting out of debt, because I didn’t have a clear picture of my situation.

However, I found that when I bit the bullet and analysed my situation in detail, I felt better! Knowing the facts, no matter how bad, is better than living with a “sword of Damocles” hanging overhead.

If you too have been ignoring those letters, please start opening them now.

Sorting that paperwork

1.       Bank statements. Overdraft? How much?

2.       Credit card / store card statements

3.       Invoices from other creditors

4.       Tax correspondence (if self-employed)

5.       “Informal” liabilities, e.g. loans from friends / family

When you’ve totalled the debts in categories 1-5, now list the positive side of your “personal balance sheet”, i.e.

6.       Estimates of the value of your assets: property; car; cash at bank (if your account’s in the black); shares; insurance policies; money owed to you, including refunds; occupational pension funds [if you’re old enough to consider cashing them in]; anything that could be turned into cash if necessary.

Now prioritise your debts, as follows:

  • Priority: “roof-over-your-head” and essential utilities, for example:
    • mortgage or rent arrears (you could lose your home)
    • other debts secured on your home (same result)
    • Council Tax (they can send in the bailiffs)
    • gas & electricity (they can cut you off)
    • water (though they cannot).
  • Non-priority: all other services you need, e.g. car loan; home or mobile phone; credit cards; all other creditors.

Income and expenditure

Now you’ve assessed your liabilities and your assets, you need to evaluate your income and expenditure. It’s a “profit and loss statement” for your life, based on your current spending pattern. Then do another, based on your “survival budget”.

You’ll need a table or spreadsheet: money advisers at your local CAB (Citizens Advice) can provide a form.

Putting it in perspective: “key ratios”

Now analyse your total debt relative to your income; also to your assets. What multiple of your net monthly income is your total debt? What percentage of your net worth? These are what I call your personal “key ratios”.

Now you are in a better position to develop your options and choose the solution that works for you.

Discretionary income

A final question: what’s your discretionary income? What’s left after tax and essential expenditure? (Not after your usual expenditure: the answer to that question might be zero, as it was for me)

Whether you think you can repay debts in full or make a partial offer, you’ll need to maximise this “discretionary income”. That’ll involve tough decisions about “needs versus wants”: between what’s essential to your life and what you see as essential to your lifestyle.

___

The above is an extract from Chapter 5 of my book “Back to the Black: how to become debt-free and stay that way”

Want to know more?

“Back to the Black: how to become debt-free and stay that way”, is now available as a multi-format eBook, to sample (first 20% free) or buy, at Smashwords: http://www.smashwords.com/books/view/22886

It is also in the Kindle store but only the first 10% is free (sorry: Amazon’s rules, not mine). http://www.amazon.com/dp/B004PLMAQM

NEGOTIATING CREDIT DEBTS

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NEGOTIATING CREDIT DEBTS

In my book “Back to the Black”, I highlight the need to classify your debts in two main groups. Priority debts have to be paid first, of course, because non-payment could cause you to lose your home, or essential services, or even your liberty. I specify which debts come into this category.

The rest are non-priority debts. In my experience, most of these are negotiable if you cannot find a way to pay them in full.

Here’s an extract from Chapter 10 of the book.

______

Classifying debts

While you were doing your “reality check” you will, I hope, have classified your debts into priority and non-priority. Priority debts will mostly, if not totally, consist of any arrears you may have built up in the essential areas of keeping a roof over your head (mortgage or rent), the associated taxes (Council Tax in Great Britain or domestic rates in Northern Ireland) and essential utilities, i.e. gas, electricity and water. (Phone rental has often been classed as a utility but it doesn’t qualify as a priority debt for this purpose, whether it is landline or mobile or broadband). There are also some other categories of arrears that could in the worst case land you in prison for non-payment, so we class them as priority debts too; they include court fines and child maintenance.

Negotiating non-priority debts

On non-priority debts – and most credit debts come into this category – one option is what I call Plan C, i.e. “Negotiate a Deal”.

Plan C involves negotiating not only for time while you put the deal together, but also for a discounted settlement on the non-priority debts. Your creditors, however, may be prepared to freeze further interest payments and late-payment charges, while you are putting your plan together and also while you are in the process of paying off any deal that might be agreed.

It may be that you have some funds available and could make an offer for “full and final settlement”. The word “full” in this context means that the debt is acknowledged by the creditor as being “paid in full” or “satisfied in full”; you are paying a lump sum, though you are paying less than the full amount. The funds you have available might come from friends and family, or maybe from the lump-sum element of cashing in an occupational pension, depending on your age (I was lucky enough – and old enough – to be able to do the latter). More usually, though, you’ll make an offer for payment in instalments.

Co-ordinating the responses

However, if you do decide to go for “full and final settlement,” then bear in mind that you will be negotiating on several fronts and not everyone will agree at the same time; a tricky situation. What you want to avoid at all costs is to have agreed with some creditors, paid them the lump sums agreed, and then to be forced into bankruptcy anyway if other substantial creditors would not agree to a negotiated settlement. That’s why you’ll find that one of my standard letters in “Resources” caters for the situation where you have agreed a deal with one or more creditors but need to delay payment of the sum agreed pending agreement from other creditors. For this particular strategy, therefore – i.e. Plan C offering lump-sum for full and final settlement – my usual warning is louder than ever: take advice.

Some creditors will be reasonable and flexible but others will be intransigent and will play hardball. However, once you have decided that you are going to take action about your debt situation, you should inform your creditors of your situation and ask them for a moratorium on interest and charges.

[the book contains a template for a standard letter to handle this and many other situations.]

Avoid the phone

At the risk of yet more repetition, this is where I say again, “don’t negotiate on the phone; do it in writing.” It is simply not necessary to pick up the phone whenever creditors phone with demands and threats; that is a stress you can do without. In Chapter 2 (“Mind over matter”) I discussed the extra stress of dealing with phone demands; even if you might say that you can handle the stress, there is another very practical reason for doing it this way. If you negotiate on the phone, and if at a later date you find that the creditor’s recall of that conversation is not the same as yours (surprise, surprise), you will have no record of what was said or what was agreed. So let those calls go through to voicemail, but then respond promptly in writing to any messages left. Do it all in writing; it’s more work, of course, but the outcomes – not only for your debt management plan but also for your state of mind – will be better.

Keep copies

Needless to say, keep copies of everything. The fact that you are able to refer to the content and the dates of all previous correspondence is worth its weight in gold. Get that lever-arch file; if you have many creditors you’ll soon fill it. Of course you will have kept copies of your outgoing letters on your computer, but when you go for meetings with your adviser it will be very helpful for that adviser to be able to scan a paper record of all the correspondence, both incoming and outgoing.

“The left hand doesn’t know what the right is doing”

Something I learned is that, while you are negotiating with a creditor, they might simultaneously instruct intermediaries to collect on their behalf. This might be policy, it might not, so be aware of the fact that the left hand might not know what the right is doing within the creditor company. If this happens, simply refer them back to previous correspondence (even sending copies of it) in a polite way. This way you retain, if not the moral high ground, at least the efficient high ground. Don’t assume everyone is super-efficient. Poor communication within a creditor company and between them and their intermediaries can work in your favour, if you are patient.

***

Talking of left and right hands … and nothing to do with debt: I can’t help repeating what was once said about the jazz pianist Erroll Garner, who at times played right on the centre of the beat with his left hand, while playing way behind the beat with his right hand:

“His left hand knew what his right was doing but it didn’t care.”

Want to know more?

“Back to the Black: how to become debt-free and stay that way”, is now available to sample (first 20% free) or buy as a multi-format ebook, at Smashwords: http://www.smashwords.com/books/view/22886

… and is now also on the Kindle catalogue. (search under the title or under “MacMahon”; sample first 10% free)

“BACK TO THE BLACK” NOW ON KINDLE

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The Kindle version of my book “Back to the Black: how to become debt-free and stay that way” is now available.

If you have one of these wonderful machines, you can find it of course by searching under the book’s title or under “macmahon”.

Alternatively you can find the Kindle version via the Amazon website at:

http://www.amazon.co.uk/Back-Black-debt-free-Telling-Experience/dp/B004PLMAQM/ref=sr_1_86?s=books&ie=UTF8&qid=1298807870&sr=1-86

Reading e-books on other devices

If you read e-books on other devices and don’t have a Kindle, you might be interested to know that you can benefit from the improved readability that the Kindle technology delivers. Before I bought my Kindle, I downloaded the free “Kindle for PC” software and found it useful, because e-books on my PC became just a little bit clearer to read.

In fact Kindle now has a whole family of apps to allow you to read e-books on PCs, Macs, iPhones, iPads, Androids, etc:  And they’re all free! (So I don’t get any commission for bigging it up)

You can find these apps at:

http://www.amazon.co.uk/gp/feature.html/ref=amb_link_157484067_3?ie=UTF8&docId=1000425503&pf_rd_m=A3P5ROKL5A1OLE&pf_rd_s=center-9&pf_rd_r=01BXV8R939MKN7R8Z3SJ&pf_rd_t=1401&pf_rd_p=225433407&pf_rd_i=1000423913

WORLD BOOK NIGHT, SAT 5 MARCH

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If you live in the UK you might have heard of World Book Night, when a million books are being given away by volunteers in one day. If you live elsewhere you probably won’t have heard about it; despite that “World” tag, it seems to be an exclusively UK event. (I suppose this is our answer to the Superbowl being called the “World Championship”)

Anyway, I’ve been chosen as an official “book-giver” for the event, which is on Saturday 5 March. So I’ll be giving away copies of my chosen book, “Toast” by Nigel Slater, all that day at Rainbow Cafe, Waterloo St, Clifton, Bristol, BS8 4BT.

When they’re gone, they’re gone.

Looking forward to it!

Want to know more?

I can do no better than to quote the back-cover “blurb” for this brilliant book:

“Toast” is Nigel Slater’s multi-award-winning story of a childhood remembered through food. Whether relating his mother’s ritual burning of the toast, his father’s dreaded Boxing Day stew or such culinary highlights of the day as Arctic Roll and Grilled Grapefruit (then considered something of a status symbol in Wolverhampton) this remarkable memoir vividly recreates daily life in sixties suburban England.

Go to Toast | World Book Night

WIKIPEDIA FOUNDER HITS BRISTOL

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This is old news now, as they say about anything that’s more than one news cycle old. However, before I forget, I need to acknowledge that a couple of weeks ago Jimmy Wales, the man who founded Wikipedia, spoke in my current home city, Bristol.

That’s the British Bristol, by the way; I know that several other cities around the globe share our name.

We were honoured in that, though his UK visit was to mark the tenth anniversary of Wkipedia, this was the only public talk he gave on the trip. The event was co-hosted by Bristol University, the Bristol Festival of Ideas, HP Labs and Bristol City Council; predictably, the venue was`packed to the rafters.

Credibility

Like millions of others I am a regular user of Wikipedia. Years ago people used to joke about the assumption that “anyone could post stuff” and thus the accuracy was not to be taken for granted. However, I’ve read in an impartial source that on scientific matters, for example, it’s said to be as reliable as the Encyclopedia Britannica.

Volunteers

What I didn’t know was the size of the worldwide volunteer community of both writers and editors: 100,000 all told. 83% are men and the average age is under 30. The requirements to be a volunteer were said to be “intelligence, obsession and spare time” – but if the first two were present, the people find the time, even if it’s at 2 a.m.

Wales’s vision was of  “a worldwide force for free learning and general education, run with modest resources, engaging communities worldwide.”  To have achieved all that in ten years, providing all that information in 200 languages, with no corporate sponsorship and with a payroll that is still only 50 (” I worry if we’re getting bloated”) is remarkable.

THE QUICKENING PACE OF TIME

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“Broadcasting House” is one of my favourite radio programmes and I always make time for it. (0900 every Sunday on BBC Radio 4, if you haven’t got into it yet)

Time was a central theme in one of the first items last Sunday, 13 Feb. A character’s obsession with “the quickening pace of time”, as he grows older, is the central theme of a stop-motion film “The Eagleman Stag”, a 9-minute short nominated for a BAFTA in the “short animation” category. The film’s director Mikey Please was interviewed; the BBC website tells me that he is a freelance animator who graduated from the Royal College of Art last year [only last year and winning a BAFTA? Impressive!]. He has directed several music videos and title sequences as well as making his own short films.

By the way, through watching the award ceremony later that day I now know that Mikey’s film won the BAFTA. Do the people at the BBC know something that we don’t know? Was his selection as an interviewee a lucky or a smart choice? Or did the editors at “Broadcasting House” have a time machine?

Alvin Toffler

The quickening pace of time as one gets older is, of course, not a new theme. I remember reading Future Shock and The Third Wave, Alvin Toffler’s remarkable books of 1973 and1981 respectively. Toffler was very interesting on this phenomenon. He suggested that one solution was for retirees to live in enclaves where clocks ran slower. He was totally serious, of course. Although I haven’t retired, I qualify, age-wise; I want to move there now.

An anecdotal, non-scientific illustration of the time-speeding-up phenomenon came from the late Tony Curtis, when interviewed in his 80s.

Interviewer: “Could you give us a thumb-nail sketch of your movie career?”

Curtis: “Well, I arrived in Hollywood as a very young man with very little money. So I checked in to the cheapest motel I could find. I had a shower and put on a clean shirt; then I came down here to meet you.”

Which proves the point rather neatly.

Stop-motion and “The Wind in the Willows”

Back to that interview about animated film “The Eagleman Stag”. Paddy O’Connell, the host of Broadcasting House, said: “from Wallis and Gromit onwards, the UK has a hold on stop-motion”.

I love Wallis and Gromit to bits (and I live in Bristol, where Aardman Animations is based), but I really must dispute the idea that the UK’s hold on stop-motion started with them. Paddy is maybe too young to remember, or he didn’t have young children in the 80s, as I did, but in 1983 there was a wonderful feature film version of “the Wind in the Willows”, followed by more than one TV series. They were produced by Cosgrove Hall and voiced by wonderful British character actors such as David Jason and Michael Hordern. Both the feature film and the TV series were, according to good old Wikipedia, “sometimes misidentified as being filmed in claymation, which is incorrect. The method used by Cosgrove Hall is a stop-motion animation process using scale model sets and pose-able character figurines.”

Best version

A review of the 1983 feature, on Amazon, says: “Before it became a Wallace-and-Gromit ghetto, model animation was pioneered by Cosgrove Hall – and this is arguably their magnum opus. Beautifully produced, lovingly detailed, with a great vocal cast and classy score, it has the nerve to stick closely to the book. As a result it is the best screen version by miles and, in my opinion, likely to remain so.” To which I can only say “hear, hear!”

PHONE CALLS FROM CREDITORS AND HOW TO MANAGE THEM

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In my post of 2 Feb 2011 (“Is there life after bankruptcy?”) I quoted an article from “Moneywise” magazine (Jan 2011), containing a useful summary of the danger signs that debts might be running out of control. The last item on that list of danger signs is the one I want to go back to today:

  • If you are not opening bills and are screening calls from creditors, seek advice. Ignoring payments will not make them go away and the problem will only get worse.

Firstly, I agree totally about seeking advice if any of those five signs fits your situation. And yes, I agree totally that ignoring payments – ignoring the situation in general – will make the problem get worse.

Not opening bills? Ten years ago, I was “guilty as charged” on that score. I know from bitter experience that mounting interest charges, penalty charges etc can result. Luckily I didn’t get to the point of being taken to court, despite many threats.

Incoming phone calls

However, it’s the question of incoming phone calls I want to talk about here. Yes, the fact that you feel you need to screen phone calls is one sign that you’re worried about your debts.

However, there is a case for letting your answering machine take those calls, subject to one important condition: that you take note of any messages left by your creditors and you respond to them in writing.

In my book “Back to the Black” I deal with incoming calls as follows:

___

In order to create space between you and your creditors, I recommend that you conduct your negotiations in writing only. There are all kinds of benefits here:

  • You have time to think before responding.

  • It will look professional; if you are not good at composing letters, there are some examples in the “resources” section, which you can adapt to fit your situation; or you can get an adviser to help.

  • You have a record of everything that has been said by both parties.

  • … and most importantly, it is less stressful.

“Let the answering machine take the strain”.

Follow this strategy, summon up your reserves of patience and persistence, and the huge benefit is that you avoid verbal discussions. They are just too stressful right now and, thanks to that wonderful invention the telephone answering machine, you need never speak to a creditor in person.

When I say this, I am not advocating that you ignore telephone calls. No, you should respond if a creditor leaves a message but you do it in writing, referring to any previous correspondence and repeating your previous offer, if you have made one, or perhaps making an offer, if you have not done so. Alternatively you could simply state your position and ask for their understanding and for more time.

One slight disadvantage of the telephone “bubble” concept (Seve Ballesteros again) could be that your friends might notice that you are never in, even when they expected you to be so. Is that a major problem? Probably not. If you have an actual answering machine, rather than the service from your telephone provider, then you can use it to filter your calls, by listening to the machine before deciding whether to pick up. If you have “caller display” on your home phone, or you are being called on a mobile, problem solved: you can be 100% selective about which calls you accept and which you allow to go through to voicemail.

Now I do recognise that there are some people who simply cannot resist answering a ringing phone. If you are one of those people and you can’t break the habit, then all I can say is that I hope you are someone who is not stressed out by this kind of situation, in which case you are in the lucky minority. In such a case, carry on following your instincts and answer the phone, but I would still urge you not to conduct a negotiation on the phone. Simply take in what is said and offer to think it over and reply – but in writing.

Always respond both to written correspondence and to phone messages and do so Promptly, Politely, Professionally – and Persistently (i.e. sticking to your guns). In the resources section at the end of the book there are some examples of letter formats you could customise

END OF EXTRACT

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I hope that the above is of help. If you need more info (for example if you want to know why I refer to Seve Ballesteros!), get in touch or read my book.

___

Want to know more?

Want to view, free of charge, the first 20% of my multi-format eBook (“Back to the Black: how to become debt-free and stay that way”)?

Go to:  http://www.smashwords.com/books/view/22886

REPAIRING YOUR CREDIT SCORE

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A few years ago, while I was busy solving my debt problems, I was a subscriber to the credit rating service provided by Equifax, who are one of the leading companies in that field. This week, I’ve found in my old files that I’d printed out from their website a very useful page. I think it’s so good that I make no apologies for reproducing it virtually intact, with acknowledgements to Equifax.

____________

REBUILDING DAMAGED CREDIT

Bad credit can happen to good people. Don’t despair. There are ways you can get your credit back in shape. But you have to start working on it today — and keep working hard to show potential creditors that you’re serious about getting your credit back in order. As you do so, your ability to obtain credit will improve over time, resulting in better credit offers and a substantial savings in money.

Get Started Now

Open new accounts and pay them off. Being able to repay a variety of new accounts is a key step in rebuilding your credit. That means that devising a strategy to open and pay off as many different kinds of accounts as you can is better than adding more debt to an existing credit card.

Start small. Rebuilding your credit can be similar to starting over from scratch, and starting small may be the easiest option. Credit cards from department stores can be useful.

Consider asking for help. If you can’t qualify on your own, ask a friend or family member to co-sign for a small loan or credit card. If you can stay current on a major credit card account or small car loan, this will speed up the process of re-establishing good credit in your own name.

Consider a secured credit card. They are guaranteed by a deposit that you make with the credit grantor. The cards offer the purchasing power of a major credit card. Just make sure the grantor reports payment histories to one of the credit reference agencies so you ‘re building your positive payment history.

Use your new accounts in moderation. And make payments that are more than the minimum. You can keep a small balance so that your positive payment history will continue to show up on your credit report.

Keep your balances low. Avoid carrying a balance that is more than 30% of your credit limit (creditors may view it as excessive debt that you may not be able to stay current with).

Be Patient – it’s Worth it

It takes some time for your new credit history to gain momentum. You’re demonstrating that you are not depending on certain credit cards and loans for your financial survival.

That’s why opening and paying down accounts may make it a little easier to get more credit. With patience and timely repayments, you will likely be able to build a new credit history that creditors will look upon favorably when making decisions about your ability to handle even more credit.

__________________

Want to know more?

1.      Want a link to the article and the Equifax website? Go to: https://www.econsumer.equifax.co.uk/consumer/uk/sitepage.ehtml?forward=gb_elearning_credit33

2.      Want to view, free of charge, the first 20% of my multi-format eBook “Back to the Black: how to become debt-free and stay that way?” Go to:  http://www.smashwords.com/books/view/22886

KEN LIVINGSTON, PATRON SAINT OF TRAVELLERS

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I know that many Londoners complain about their public transport. The overcrowding is a problem, of course, and one that I have recently experienced. I’ve seen how often people don’t even try to get on to a Tube or Overground train because there is not even any standing room; not even “room for a small one?”

However, I’d suggest that one thing they could do, in order to feel better about the transport where they live, is to spend a few months outside the capital and then go back to London to see the difference. OK, compared with most other European capitals London’s system could be improved, but let’s judge by British standards. We have many unique qualities but, as we all know, we are not world-famous for efficient public transport.

Last week I was “up in town”, as we yokels say, for a Facebook marketing seminar at the Thistle Marble Arch. The Thursday session finished just before 18:45 and I had to get up to my daughter’s flat in Haringey; some considerable distance, which would require at least one change, whether I went by bus or train. I knew I needed to go east, then north, and I didn’t want to take a bus along Oxford Street as I know how slow that can be on a Thursday, i.e. late-shopping night. As I left the hotel into a side-street, three buses pulled up, all going north; wonderful! One was going to The Angel so I figured that would do as a first leg. Sure enough it got me to Camden Town within 20 mins. Leaping out there, I found a 29 heading north for Haringey, right behind it. So I got on board and was soon at my destination.

I waited less than 30 seconds for both buses. Luck of the Irish, you might say. Maybe, but at that time of the evening you might have had to wait 30 minutes in the city where I live, not 30 seconds. I got a seat both times, I might add.

The next morning, I used trains just for variety. Leaving my daughter’s at 08:00, I was at Haringey Station at 08:02; a southbound train arrived 2 mins later. Changing at Highbury, I walked across the platform to a Victoria Line train two minutes later and then changed at Oxford Circus. I was at Marble Arch station at 08:30. That was less than 30 mins after setting out from Haringey station. Look at the map and you’ll see that was something.

You might like or dislike Ken Livingston’s politics; like or dislike his talent for self-promotion that led to the slogan “Mayor of London” being so ubiquitous. As a non-Londoner, however, I am impressed with how efficiently the capital’s public transport functions. Strikes permitting, Transport for London gets my vote.

Please, please, Ken, now you have some spare time I beg you to come and fix the public transport here!