Category Archives: Personal finance

This category contains information on how to deal with personal debt. It is based on the fact that I went through a serious debt crisis in the late ’90s. I was very close to filing for bankruptcy but I found another way, so I am always keen to pass on what I learned from that experience.

DEBT ADVICE BACKLOGS IN THE UK

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When I was doing that second radio interview with Heart FM earlier this week, an instructive fact about the state of our economy cropped up.

I was talking to Heart’s Rob Mayor about the necessity for Brits with debt problems to get tailored and impartial advice, preferably from one of our excellent independent advice organisations within the charity / voluntary sector. The best-known examples at the national level are probably CAB (Citizens Advice), CCCS (Consumer Credit Counselling Service) and National Debtline. I also said that a face-to-face interview was better than a phone helpline, especially for anyone starting to get to grips with the problem for the first time.

However, just before we started to record the interview, I had a call from Citizens Advice in response to an earlier enquiry of mine. As Rob and I had just been talking about the recession, I asked my CAB contact what was their current waiting time for a face-to-face debt advice interview. The answer was 3 – 4 weeks; longer than usual and a sign that the effects of the recession will be with us for quite a while yet. Phone help is, of course, available a lot more quickly.

"BACK TO THE BLACK" UPDATE

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Yesterday I was working with Jenny Layton, who’s giving me fantastic help with the text-editing of Edition 2 of “Back To The Black”, i.e. the complete content as an e-book. I am still hoping we’ll get the file uploaded by the end of February.

After that the next project will be a podcast and an audio version of the complete book.

This morning I did another interview with Heart FM, this time with Rob Mayor. This came about because Heart felt that the issue of “Payday Loans” needed exploring further. We talked about why people are tempted by such loans, the benefits on which they are sold, and the well-known disadvantages of the astronomical interest rates. Those rates could be affordable if it’s the only game in town AND if the loan really is repaid really quickly, i.e. on payday, but if it’s rolled over then the problem starts.

We talked about credit unions as an alternative to high-street lenders or to payday loans.

I also stressed the need to take advice, preferably from an independent, impartial (i.e. not-for-profit) advice service such as the local CAB (Citizens Advice Bureau, for the benefit of any readers of this blog who are not in the UK) or CCCS (Consumer Credit Counselling Service) or National Debtline. Then the need to formulate a plan with the aid of that advice, and to inform the creditors that is what you’re doing and ask them to freeze interest while that’s happening. If you don’t ask you don’t get, but many debtors spend too long in denial (and I was one) and don’t communicate, which makes the situation worse.

All this is the kind of advice that most people have read lots of times; however, my hope is that when the complete book is published, people will view the advice in a different light because of what I say about where I went wrong. In fact the book’s subtitle could even be “Learn from my mistakes”.

BACK TO THE BLACK: RADIO INTERVIEW

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Today I was a guest on the drivetime show at Bristol’s community radio station BCfm, (link here for website), being interviewed live by Station Manager Phil Gibbons about “Back To The Black”. Although I had been a presenter on the station for much of last year, it was a new and pleasant experience being a guest. For a start, I didn’t have to pay for my coffee this time. Seriously though, who doesn’t like being asked questions about a topic in which they are interested?



My interview was interspersed with two others: with Neil Innes and Michael Palin, no less! This was because the station was running a live outside broadcast from Bristol’s Colston Hall, where both were about to perform in the city’s Festival of Slapstick. Phil said I could now dine out on the fact that I’d appeared on a chat show with these two luminaries; and that they “kept cutting across my airtime!”

Phil asked a very good question about one of the tips from my book. I’d mentioned some of the basic stuff about communicating with creditors, making an offer, etc, and he pointed out that those tips could be obtained in other books, websites, etc. “People know that’s the thing to do” he said, “so why don’t they do it?” My answer was that people like to read stories rather than to be told what to do, so the fact that my book’s advice is interspersed with the story of my own debt problem and how I worked my way out of it, will hopefully make people more likely to act on the tips given.

Phil wrapped up the interview by wishing me well with the book: “Hope it makes you rich – no, sorry, that’s not the point. I guess your point is to stop other people becoming poor”. To which I readily agreed.

In fact the Free Edition of “Back To The Black: how to become debt-free and stay that way” is available as a free download, in .pdf format, at www.scribd.com/michael_macmahon

BACK TO THE BLACK: MEDIA RELEASE

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Here’s a copy of a media release I’m circulating today, regarding the launch of “Back to the Black.”

MEDIA RELEASE

Date: 18 January 2010

From: Michael J MacMahon

For immediate release

Subject: New book launched: helping debtors get “Back To The Black.”

AUTHOR INTERVIEWS AND PHOTOS AVAILABLE

___________________________________________________

Summary:

An author who faced bankruptcy shares what he learned and reveals the key questions that can help individuals deal with debt.

___________________________________________________

A new self-help book for people with debt problems has been launched today. “Back To The Black: how to become debt-free and stay that way” is based partly on the author’s practical experience of escaping bankruptcy and partly on the principles of coaching. Chapters 1-3 in their entirety are now available as a free downloadable file, at www.scribd.com/michael_macmahon .

The book’s author, Michael J MacMahon, says: “A few years ago I survived a major financial crisis. While digging myself out of that hole, I became interested in the principles of coaching, especially the idea that most people have the knowledge and resources to solve their own problems, if only they get the right support. One of the best ways of providing that support is to ask the right questions, because questions help to focus thinking, especially at times of stress; and being in debt is certainly one of those times. The book is thus derived from my experience and also demonstrates how those key questions can help anyone get out of debt.”

The book has been favourably reviewed by debt advice experts at the UK’s Citizens Advice organisation. Some of the best advice is simple practical stuff, for example:

  • Start by listing all your debts, bank balances and assets: knowing the truth is better than a vague feeling of threat.
  • Communicate with creditors: the problem gets worse if you ignore it.
  • Make an offer: any offer, no matter how small, is better than none.
  • Never negotiate on the phone: do it in writing; it’s less stressful.
  • You don’t need to be alone: get help from a debt advice organisation.
  • Keep records of all communications: it pays dividends.

BOOK LAUNCH: "BACK TO THE BLACK"

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The free download version, containing Chapters 1 – 3, of my book “Back To The Black: how to become debt-free and stay that way” is now available as a .pdf file.

It’s on the social publishing site Scribd.

Click on this link, or copy and paste this URL into your browser:



http://www.scribd.com/michael_macmahon



It’ll also be available on other sites soon. Watch this space!

About The Author

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My name is Michael MacMahon, a septuagenarian with no interest in retiring who has developed a portfolio career drawing on a lifetime of personal and professional experience instead. I am…

  • a writer
  • a speaker on a wide range of subjects; I also coach speakers
  • a voice actor who makes occasional forays on to screen and stage

I have written a book called Back to the Black, about getting out of debt and managing your personal finances so you stay that way.  I also blog from time to time (see online home) about the challenges of public speaking and other subjects that interest me.

 

Biography 

A native of Haverfordwest in Pembrokeshire, I spent my university years at Imperial College, London and afterwards had a 25-year career in the chemical industry, ending up as Managing Director of a sales and marketing company in the Swedish-owned Holmen group. I left to set up and run a training consultancy where I designed and delivered courses for major corporate clients in Scandinavia in business communications skills – delivering impactful presentations, running effective meetings, telephone skills and the like – combined with teaching the English language. I then spent five years working with a major UK health charity, first in fundraising and then in media relations.

I have been a frequent speaker at corporate events, fundraisers and social functions for 35 years.

Nowadays I live in the great city of Bristol, in the West of England, avoiding retirement and enjoying a wide range of projects.

 

The National Situation

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Consumer Debt

Consumer debt has spiralled in recent years and average household debt in the UK, according to Credit Action, is approximately £58,000. Total UK consumer debt, according to the same organisation, was £1.46 trillion at the end of March 2010. That’s almost £1,500 trillion, or £1.5 million million; a mind-numbingly large number. To put it in perspective, it is slightly more than the UK’s total income (GDP), which was £1.396 trillion in 2009 according to the Office of National Statistics (ONS).

As Credit Action’s website succinctly puts it:

“Individuals owe more that what the whole country produces in a year”

The trend of increasing personal indebtedness, a by-product of our consumer culture, certainly contributed to the financial crisis.

Mortgage Debt

Most personal debt is, at least in the UK, secured mortgage debt. Levels of home ownership have traditionally been higher here than in most other European countries. It has always been considered that mortgage debt is safe debt; that was true for as long as the housing market continued its customary rise but at times of recession in the housing market, mortgages have led and will lead more and more borrowers into negative equity, where their property’s value falls below the amount borrowed. Whenever these conditions apply, then mortgage debt certainly does have to be factored into the equation.

BACK TO THE BLACK 2

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In my last post I said I had decided to write a book about my debt experience and what I had learned from it; and that I had decided to self-publish, first as an e-book.

I’ll be blogging about the topic too. One of the obvious advantages of this form of publishing is its immediacy and flexibility and the way one can link to other sources of information. Thus I’ll certainly aim to signpost people who want advice on debt problems, to helpful websites and blogs. Here are two absolute “musts”.

1. Martin Lewis’s massive site is always worth looking at, especially his “Debt-free wannabe” section: http://forums.moneysavingexpert.com/forumdisplay.html?f=76

2. The Motley Fool website is another well-known resource for financial advice of all kinds and they have a “Dealing with Debt” stream among their discussion boards: http://boards.fool.co.uk/Messages.asp?bid=50079

BACK TO THE BLACK

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A few years ago I hit a financial crisis. I had a business which, after five very promising years, had begun to stagnate. I had turned a blind eye to the problem and came very close to bankruptcy. With the help and support of friends and of a few professionals (one of whom happened also to be a friend) I was able to avoid that, and eventually came through the experience without permanent scars to my spirit or credit rating.

Later, I decided to write a book about the experience and what I had learned from it. My book would be written from the perspective of someone who had been there, had the problem and found a way out of it.

After spending a lot of time over the past two years trying to get a deal with mainstream publishing houses, I have now decided to self-publish the book. It will be available first as an e-book; later, depending on demand, as a paperback and an audiobook.

The e-book will be available early in the New Year. Its working title is “Back to the black: how to become debt-free and stay that way.” If you’d like to be advised by e-mail when it’s available, please post a response on this blog.