DEBT ADVISER TELLS IT LIKE IT IS

advice centreOne of the debt charity StepChange’s  advisers moved on earlier this year. His farewell blog post was very informative: a good example of the advice that’s available regularly on their blog. I am sure he – and StepChange – will not object to my quoting it.

“Six truths about debt I’ve found from working at StepChange Debt Charity” (Matthew Cooper)

Truth 1: Creditors will generally accept your best offer of payment

Provided that they are convinced it really is your best offer, I’ve usually thought this to be true. But Matthew’s evidence in support of the theory is amazing: only one proposal rejected … out of 300!

“My job was to give advice on debt solutions and draft the actual individual voluntary arrangement (IVA) documents for clients. I drafted around 300 IVA proposals in about two years. All but one of them were accepted by creditors. I learned that if you make your best offer to creditors they’ll generally be willing to accept.”

Truth 2: Debt can happen to anyone

That’s something I found when researching stories for my book ‘Back to the Black.’ Matthew confirms this:

“While working as an IVA drafter I heard many stories of how people ended up in debt. In most cases debt problems are caused by life-changing events such as unemployment, relationship breakdown, accident or illness.”

Truth 3: Bust out the budget

Here’s the painful part, when you move out of the “denial” phase and start to analyse your financial position. Some humourist once said “A budget is a mathematical confirmation of your suspicions” … but it’s surprisingly true that knowing the worst is less stressful, compared with suspecting the worst but not being sure. Then, when you have an accurate picture of your current situation, you can start to draft a budget (maybe a few versions for different scenarios: see my book) that’ll help you decide what to do next. Matthew says:

“In my time here I’ve helped a lot of clients to put together a budget; as someone who is keen on budgeting I was sometimes amazed that some had never put an accurate budget together before. Over the years I’ve seen the clients who paid careful attention to their budgets be successful in repaying their debts. I now spend at least an hour a week looking over my budget to make sure I stay on track. An emergency fund is also a vital part of a budget, whether you have debts or not.”

Truth 4: Credit isn’t necessarily bad

“I’ve learned that credit isn’t necessarily a bad thing in itself and, like most things in life, it can even be good in moderation. It’s vital not to over-commit yourself though and you should be prepared as your life can change at any time. Despite their bad press creditors aren’t all bad either, as long as you’re honest about your situation. As a charity we want to help the ‘can’t pays’ rather than the ‘won’t pays’; creditors tend to share this attitude.”

That’s an interesting statement right there at the end: the “can’t pays,” as he puts it, are the group that StepChange exists to help; and they are the group with whom creditors are more likely to negotiate reasonably.

Truth 5: Never pay for debt advice

Matthew says:

“I’ve also learnt that there is genuinely no need to EVER pay for debt advice. Our advisors are brilliantly trained and highly knowledgeable and will always strive to give the best advice for your personal situation. We’re not for profit but we are for giving best advice.”

Truth 6: My colleagues are great at helping people in debt

I’ve never spoken to those colleagues personally; my own crisis was back in the ‘90s. However, judging by the quality of the info on their blog, I would support that statement 100%. So I’m sure Matthew won’t mind if I repeat in full his plug for his colleagues:

“I’ve made some great friends while working for the charity and together we’ve served a great common cause – ‘free debt advice’. My colleagues are knowledgeable, committed, ethical, funny and warm and they treat people who contact us with a great deal of empathy and never judge them. It’s time for me to hand over to another person to take on my role now. I hope they enjoy it and learn as much as I did during my time with this great charity.”

Citizens Advice was the charity that helped me with my debt crisis, largely because they had a Bureau near me where I could have face-to-face meetings. However they are a generalist advice charity, whereas StepChange is a debt specialist.

And judging by their blog, an excellent one.

WANT TO KNOW MORE?

For Stepchange’s “Moneyaware” blog, click HERE. http://moneyaware.co.uk/

For info about my book “Back to the Black”, click HERE. http://getbacktotheblack.com/

INTRODUCTORY OFFER FOR KINDLE VERSION OF “BACK TO THE BLACK”

As I write, the experts are dissecting on TV the impact of the Budget just unveiled by UK Chancellor George Osborne. I don’t claim sufficient expertise to add to the acres of coverage it will already be getting. What I do know, though, is that the uncertainties in the economy have already led more and more people into debt.

As I have just uploaded my dealing-with-debt book to the kindle store, and as I feel sure that thousands of people could benefit from it, I want to ensure it gets into the hands of as many of them as possible. I don’t want the price of the book to be a barrier.

For an introductory period, therefore, the kindle version of “Back to the Black: how to become debt-free and stay that way” is available at a launch price of £0.70 (or $0.99 plus VAT). Go to http://www.amazon.com/dp/B004PLMAQM

For the sake of consistency, this promotional price also applies with immediate effect to the multi-format versions, including .pdf, that were already available in the Smashwords store (http://www.smashwords.com/books/view/22886). The price adjustments in both stores are already active.

WANT TO KNOW MORE?

Reading eBooks on other devices

You don’t need a kindle to read kindle-format books! If that doesn’t make sense, what I mean is that if you read eBooks but don’t have a kindle, there is a neat piece of (free!) software called “kindle for PC”, enabling one to benefit from the improved readability of the kindle technology (and it really is) when reading on a PC or any other device. There is also a Mac version.

For a download link, just type “kindle reading apps” into Google.

Book links

To sample or purchase “Back to the Black: how to become debt-free and stay that way”, go to on of the following retail sites:

kindle: http://www.amazon.com/dp/B004PLMAQM

Other e-formats, including .pdf: http://www.smashwords.com/books/view/22886

Note: unlike physical books, eBooks carry VAT (I don’t understand the reason for the difference). The price in dollars is thus $1.14 to include VAT, i.e. British sales tax, even if the book is bought via www.amazon.com . In sterling the £0.70 price includes VAT.

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You can follow me on Twitter: @michaelmac43, or Facebook: Michael James MacMahon.

FREE EBOOK FOR YOUR “BUDGET XMAS” IDEAS

Would you like to win a free copy of my e-book “Back to the Black: how to become debt-free and stay that way”? I’m giving away five copies for the best “budget Xmas” ideas I receive between now and 20 December.

The reason is simple: getting out of debt is one thing but of course you probably won’t stay out if you carry on spending money at the same rate as before. Cutting costs is not easy, but generating more income is harder, especially in today’s climate. So we all need to share ideas on saving money.

Santa reports peer pressure still strong despite recession

Managing costs is, of course, especially difficult at Christmas, with all the pressure from advertisers, and even harder if you have small children.

Right now, wearing my actor’s hat, I am spending ten days as Santa in a budget store in Wales.  When I ask the children (who are, without exception, delightful): “what’s the best thing about Christmas for you?” the answer in 95% of cases is, predictably enough, “lots of presents”.

Peppa Pig

By the way, if you are interested in toy branding, Peppa Pig is the name I hear most often while wearing the Santa hat. The name comes up unprompted, although I try to avoid getting into discussion of specific gifts. I don’t want to provide yet more cost pressures for the mums and dads who are generally standing nearby.

The popularity of Peppa Pig is good news for the BBC, as they no doubt make lots of money from the merchandising of this TV show. I’ve heard that Toys R Us has 84 Peppa Pig products; that’s a juggernaut for any parent on a limited budget to resist.

Ideas win books

My book has a final chapter called “Keep up the good work”, which is all about ideas for staying out of debt, once those debts have been cleared. Most of the ideas in that chapter are about saving money but I’m always on the lookout for new ideas. So the five best “Budget Xmas” ideas, suggesting how you plan to have a great Christmas without spending a fortune, will receive a free copy of the book in .pdf format. The ideas will also be featured in the book’s second edition.

Please e-mail ideas to me (michael.43@blueyonder.co.uk), or you can post them on this blog as comments, whichever you prefer. Entries requested by 20 December, please.

Want to know more?

My book “Back to the Black: how to become debt-free and stay that way” is available on the Smashwords site. To sample (first 20% free) or to buy at only $3.99, go to http://www.smashwords.com/books/view/22886