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BankFodder

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Blog Entries posted by BankFodder

  1. BankFodder
    I got there early today. I decided that I needed to get there before most of the others, stretch around a bit, limber up and generally look cool. You know what I mean. I figured that if I could get into the mindset a bit then I would be more in control, that I wouldn't be chasing it all the time and I could structure myself a bit as I went along. You can tell that I am really starting to mellow about this thing, can't you. I wouldn't be the one always out of step or starting off on the wrong foot all the time. Have you seen raw recruits starting to march and they put the same arm and foot forward? That's a bit how I've been for the last sessions but this time was going to be different. Also, I was going to start trying to monitor my progress and even start setting some targets. Way to Go!!!
     
    So the music starts and we get started slowly and I'm in the rhythm and I'm thinking that I might manage to stay focused on the whole session this time - and then this girl walks in. Fit.  Whisky-wow-wow, I breathed. Magnificent and she was dressed in beige hotpants and light brown plunging neckline and knocked around woollen legwarmers with holes in looking just as cool as a pair of levi hipsters I had over 30 years ago which I spent ages kicking around and washing and re-washing until they looked just right. And she was incredibly fit - I mean what was she doing there? Looking like that she just didn't need it. A dead ringer for Carla Bruni - and come to think of it maybe it was Carla Bruni - maybe I am going to get her tested to see if there are any traces of Mick Jagger inside her (homeopathically speaking), just to be sure. Anyway, that was it. I fell apart, kept on losing my place and my step, point, talons, point, talons, oh yeah, whoops, right leg or left leg, blah blah. Nightmare. All my plans out of the window. And instead of my interest levels collapsing in 5 minutes, it was about 35 minutes before the effort and pain of the whole thing started to engross me more than Carla. Sullen looking as well and pouting - but really dark and really really sullen. And fit.
    It didn't help either that everytime my attention started to return to my own body, she would start ferreting around in her capacious handbag - out comes the Blackberry and she's texting 85 words per minute and 2 minutes later she's checking the responses. She must have had that Blackberry out of that bag at least a dozen times and I can tell you that it had a distraction value of 8/10. What does any woman need a bag that big for anyway. I wondered if her present Beau was actually inside typing his answers. I was really getting angry about it. I'd like to get her phone number and send her a message that her house is on fire. 
    Anyway, after about 35 minutes of it I manged to lose interest (mostly) and get back to what I was doing.
    The trouble was that by that time, I was in my usual state with blood pumping over my eyes and trying to take little short breathers without Francoise noticing too much. All my great ideas and my planning and confidence out of the window. I may have to go to Plan B. 
    I don't suppose that Carla was too impressed either. I wonder whether she is going to come again?
     
    I'm quite impressed that I actually manage to think about something other than pain for 35 minutes. The trouble is that I can't figure out if it is because I am actually improving after 4 sessions or it was just because of Carla? I'll have to give this some thought.
     
    God came down to check out his handiwork. He asked Adam how it was going. Adam said it's fine, but the women, God, why did you make them so beautiful?
    So that you'll love them, says God.
    Wow, God - that's brillliant ... but why did you make them so stupid, asks Adam.
    So that they'll love you, says God.
  2. BankFodder
    Many people with multiple credit debts often feel that a consolidation loan is the right solution to help them manage their payments. On paper it sounds like a great idea – one manageable monthly instalment which is often a great deal lower than all of the current payments combined. Pre-credit crunch television advertising was awash with various lenders offering these amazing solutions, some employing celebrities to endorse their various products. Many of these companies targeted home-owners citing the possibilities of ‘unlocking’ the equity within their properties. Out of every advert I came across not one of them used the word ‘Mortgage’. 
    Don’t get me wrong, for some people a consolidation loan is viable option, it might actually save a great deal of money in long run – especially if the current debt is sitting on expensive credit cards. The main problem with consolidating is that, once consolidated, there is the risk of borrowing on the various cards again and thus inflating the magnitude of the situation much more. Those that consolidate must erase the temptation of borrowing – cancel the cards! Consolidating can be expensive, often interest has accrued on the original agreements which will then be consolidated against; the new agreement will also attract interest – and so the situation compounds. This gets even worse if the original agreement had payment protection insurance. Many individuals note the nice low monthly instalment, it could be caused due to the fact that the consolidation loan is over many years, I’ve seen some that are 15,20,25 years long. The interest which could accrue over a long period of time could become a very significant amount indeed. 
    Secured loans should be avoided if at all possible. Turning debt from unsecured to secured converts it from being regarded as a non-priority to priority. Failure to pay a secured loan could result in the repossession of your home. It is much, much more difficult to negotiate reduced payments on a secured loan than it is an unsecured one although the recent changes to the Consumer Credit Act now give greater provisions to allow you to ask a court to make a ‘Time Order’ which could reduce your instalments to a level which is more manageable. 
    If consolidating is something that you are seriously considering it is imperative that you seek financial advice to ensure it would be in your best interests, and that you get the best possible deal. If you’re interested in speaking to someone knowledgeable, who will not try and sell you something please consider seeking advice from the folks at the Money Advice Service
    http://www.moneyadviceservice.org.uk // 0300 500 5000
  3. BankFodder
    4)    Debt Relief Order (DRO) [England & Wales]
    Debt Relief Orders are a very new addition, introduced in the last few years. They are designed for those with very few assets and very limited income. An application for a DRO can be made if you owe less than £15,000. If an application is granted the creditors are prevented from contacting you for a period of 12 months, during this time the interest and charges on the debts are frozen. If your circumstances haven’t improved the debts will be written off at the end of the year. To qualify you need to ensure that your assets are worth less than £300 (if you have a car it has to be worth less than £1,000). You also need a disposable income of less than £50 per month. You apply by making an application via an ‘approved intermediary’, all the aforementioned agencies have intermediaries that you can approach to help you. More info here: 
    http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=37_debt_relief_orders
    5)    Administration Order [England & Wales]
    An Administration order is a single county court order that covers credit debts and certain other debts, which are all treated together. It allows you to make a single payment every month into the court. The court staff will then divide the money amongst your creditors on a pro-rata basis. Whilst an Administration order is in place, none of the creditors listed on it can take any action against you without first getting the court's permission. Visits from debt collectors, letters or phone calls from your creditors should stop once the Administration order is in place. To qualify for an Administration order you would need to have at least one county court judgment (CCJ), at least one other debt and an overall debt level of less than £5,000. More info here:
    http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=09_administration_orders
    6)    Debt Arrangement Scheme (DAS) [Scotland]
    A DAS is a debt-payment arrangement system set up by the Scottish Government. It is designed to help you manage your debt repayments and can also provide protection from creditors making you bankrupt or enforcing your debts by diligence (enforcement action through the sheriff court system).Under a DAS debt-payment programme, you will have to make a single regular monthly payment, whilst you keep up with your payment the interest and charges on the debts will be frozen. A DAS has many similarities to a DMP although it affords greater protection to you. To qualify you need to demonstrate that you can clear the debt within a reasonable period of time, this usually equates to within ten years. More info here: 
    http://www.nationaldebtline.co.uk/scotland/factsheet.php?page=22_debt_arrangement_scheme
    7)    Trust Deed [Scotland]
    A trust deed is a formal agreement between you and your creditors. It passes your assets and property to a trustee to be administered for the benefit of creditors and the payment of debts. Once the trust deed is set up it is legally binding. Providing it meets certain conditions, a trust deed may be recorded in the Register of Insolvencies as a 'protected trust deed'. This prevents the creditor from making you bankrupt so long as you stick to the terms of the trust deed. A trust deed usually lasts for 36 months so is a relatively quick option, it is an insolvency measure so has several serious implications that would need to be considered – such as a significant impact on your credit rating. If you are under a trust deed you are not allowed to be a company director. More info here:
    http://www.nationaldebtline.co.uk/scotland/factsheet.php?page=21_trust_deeds
    8) Write Off [England, Wales & Scotland]
    In certain circumstances your creditors may consider writing your debt off, this is especially pertinent if you are unwell and are unlikely to get better. If you have assets such as a property it may be significantly more difficult to convince a creditor to allow you a write-off as they may wish to try and secure the debt. Often the creditor may wish to see supporting evidence – such as a doctor’s letter. As with all debt options you may need to be persistent, it could take several attempts before a creditor grants the write-off.
    9) Full & Final Settlements [England, Wales & Scotland]
    A full & final settlement is an arrangement where a creditor accepts a lump-sum payment to clear the balance of a debt. This lump-sum is a lesser sum that the total amount owing, thus some of the debt is written-off. Full & final settlements can often write significant sums of money off, especially if the debt is old or if the debtor has had a change of circumstances which means that repaying the debt would take a very long time, if at all. Some creditors may call a full & final settlement a ‘short settlement’. The key to negotiating full & final settlements is to do so in writing, always ensure that the creditor is going to accept your settlement and not pursue the remaining balance or pass it on to a third-party to collect. You should always keep this confirmation in a safe place as it can be used as evidence should a creditor ever try and chase for the remaining balance (this is quite a rare occurrence). Full & final settlements are particularly successful if you are being chased for an old debt, or if the debt has been sold on to a debt collection agency. If the debt is being ‘passed around the houses’ do not be afraid to offer a very low sum. 
    You may have read on the forum that full & final settlements are not contractually binding from a legal standpoint; in some instances that likely to be true. This is why it is vital that you keep a copy of the creditor’s acceptance of the settlement. If they then go against their promise it can be argued that they are acting unfairly, the legal doctrine of ‘promissory estoppel’ will afford you legal protection if it ever went to court. For piece of mind some individuals draw up a legal document outlining the full & final settlement, it’s unlikely you will have to do this with your regular creditors. More info here:
    http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers
  4. BankFodder
    The majority of debtors owe money to the people they hold a bank account with. This makes it easy for the banks to grab money from their income to off-set against the debts when things start to go wrong. One of the cornerstones of ensuring yourself a debt-free future is to move your banking arrangements to a 'safe' bank account. This will be an organisation with to whom you owe no money to. Once your income is safe guarded your creditors will not have an automatic right to your money. This puts you in a much stronger position to negotiate reasonable and affordable payments. 
    What about my overdraft?
    An overdraft is a debt, just as much as a credit card or a loan; and so you should treat it as such. When you move to your new bank please ensure that you do not have any form of borrowing - not even an overdraft. If you have an overdraft with your old bank include it as a creditor along with your loans, credit cards etc. It's always important to put all your creditors in the same basket, this means that you'll treat them all in a fair and equitable manner.

    What if I can't open an account due to my poor credit score?
    So long as you can prove who you are and where you live you should be able to open an account. You should ask for your new bank for a basic bank account. This doesn't give you any form of credit, although you should have the facility to make payments via standing order and direct debit. A few even give you some form of debit card. 
    Be sure to choose a bank which isn't affiliated with one that you have debts with. As an example those with a Mint credit card should avoid the Royal Bank of Scotland. In fact it might be worth avoiding Natwest as they are closely linked to the Royal Bank of Scotland too. You can find a list of who is connected to who here:
    http://www.lendingstandardsboard.org.uk/subscriberlist.php
    If you old bank makes things difficult for you to switch DO consider a formal complaint. Under the Lending Code a bank should treat your situation in a positive and sympathetic manner. You can read the code here:
    http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf
    It's fully appreciated that switching banks can be a total rigmarole, but in the long-term it's one of the most important aspects to dealing with your debts.
    Nine Banks have now launched fee free accounts :-
  5. BankFodder
    There are many options available to you if you are struggling to meet your debt commitments. Some of these options are more serious than others. Due to the recent economic downturn many fee-charging, commercial companies have cropped up offering all sorts of solutions to assist the public with their debts. These companies are out there to make money, and although some of the solutions might be viable it is important to seek advice from a reputable organisation to ensure the solution is right for you. For example, over the last few years there has been plenty of television advertising highlighting a ‘little known government scheme that can write off up to 80% of your debt’. This option is known as an ‘Individual Voluntary Arrangement’ (More information about those later on within this blog entry), and although it is possible under the arrangement to have a large percentage of your debts written off there could be significant implications involving property and possibly employment too. What this blog entry will do is outline some brief information about all of the debt options out there, if you are looking to take one of these schemes up I urge you to seek free, independent advice from a recognised debt charity:
    National Debtline // 0808 808 4000 // www.nationaldebtline.co.uk
    CCCS // 0800 138 1111 // www.cccs.co.uk
    Citizens’ Advice Bureau // http://www.citizensadvice.org.uk
    Some commercial firms often try and masquerade as free advice agencies, some of them have very similar names to the organisations named above. If you ever receive a cold-call from a firm stating that they are one of the above organisations it is likely they are lying. For the record, some of the fee-charging firms do a reasonable job although it is likely they will not advise you on all of your possible options – just those that they are likely to profit from. Many of these firms may offer you a ‘Debt Management Plan’(See below!), this is something that you can actually get for free, so speak to the charities. 
    DEBT REPAYMENT OPTIONS
    1)    Debt Management Plan (DMP) [England, Wales & Scotland]
    A DMP is an informal arrangement where a third-party DMP provider will negotiate with your creditors on your behalf, they will also try to arrange for the interest and charges on the debts to become frozen. This option will allow you to pay an affordable amount on a monthly basis which will then be distributed on your behalf amongst the creditors. DMP’s take away a lot of the workload and are particularly worth considering if you have many creditors. They are also totally free-of-charge through one of the debt advice charities who have a very high success rate of getting affordable arrangements sorted and interest stopped. The fee-chargers also offer DMP’s, they often charge upfront set-up costs, they will also take a monthly percentage for themselves. The fee-charges often imply that the free providers work ‘on behalf’ of the creditors, and that by charging fees they offer a better service. I’ve never personally come across a creditor that prefers an individual to use a fee-charger, some creditors even refuse to freeze interest and charges. You can read more about DMPs here:
    http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=29_debt_management_plan
    2)    Individual Voluntary Arrangement (IVA) [England & Wales]
    This is a formal arrangement through the county court to pay an agreed amount off your debts over a shorter period. Any debt left at the end of the IVA is written off. IVAs can be set up in a number of different ways, either as a monthly instalment plan over a fixed term (normally five years), or a short term arrangement if you have a lump sum to put forward. Some IVAs are a mixture of both. It should be noted that if you are a homeowner there is likely to be an equity clause that will expect you to raise funds from remortgaging which will also be paid to your creditors. If you have more equity than debt it is unlikely that an IVA will go ahead as the creditors have to ratify the proposal, they will simply argue that you are not insolvent. IVA’s used to be a huge business, and although not so many are set up these days they are still a very good option if you have a significant amount of debt. They are not cheap, Insolvency Practitioners typically make a few thousand pounds from an IVA – their fees are usually built in to the monthly instalments. A word of warning: If you cannot meet the payments under an agreement they are difficult to modify, if the arrangement fails you could incur further costs; it could also cause the Insolvency Practitioner to make you bankrupt. Recently the industry got together with the Insolvency Service and compiled the ‘IVA protocol’ which is a set of rules to ensure that Insolvency Practitioners adhere to a transparent code of practice. If you chose an IVA please consider using a ‘protocol compliant’ provider. More info here:
    http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=26_individual_voluntary_arrangements
    3)    Bankruptcy [England, Wales & Scotland]
    Bankruptcy is a way of dealing with debts that you cannot pay. Whilst you are bankrupt any assets that you have might be used to pay off your debts. After a period of time (usually one year) all of your outstanding debts are written off and you can make a fresh start. The process is relatively expensive initially, the application costs £450 with a further £150 court fees (although you may be able to claim discount or exemption if you’re on a low income). In Scotland the current fee is £100. If you are working you may also be asked to pay a percentage of your disposable income into the bankruptcy for a three year period, this is known as an income payments arrangements. Bankruptcy is one of those options which has a huge stigma attached to it, for many it is by far their best option. It will allow a fresh start to be made and will stop the creditors from being able to chase for payment once the order has been granted. Prior to petitioning you should ensure that there are no implications with your employment. A bankrupt person is also not allowed to be a director, or involved with the running of a limited company. If you are in mortgaged accommodation it may be possible to take the bankruptcy route and keep your property, this is especially the case if you have little or no equity. Other assets, such as a motor vehicle, may be sold for the benefit of the creditors. Although the bankruptcy route is a serious step it can be the fastest and cheapest way of becoming debt free. More info here:
    http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=01_bankruptcy
    Or if you are in Scotland:
    http://www.nationaldebtline.co.uk/scotland/factsheet.php?page=01_bankruptcy
  6. BankFodder
    Debt can take various forms, and some are more important than others. It is possible to place debts within two separate categories – priorities and non-priorities. The way that the two types can be differentiated is based on the action that can be taken for money to be recovered. With priority debts it may be possible for you to lose something tangible if you do not act quickly. As an example, some creditors could:
    •    Take away your home (repossession / eviction)
    •    Cut off your gas or electricity supply
    •    Send a bailiff to recover your belongings
    •    Ask the Magistrates’ court to send you to prison
    Common priority debts include: 
    •    Mortgage arrears
    •    Second mortgage / secured loan arrears
    •    Rent arrears
    •    Council tax 
    •    Gas / Electricity
    •    Magistrates’ court fines
    •    Child maintenance
    •    Benefit overpayments and Social Fund loans
    •    Income tax, National insurance and VAT arrears
    •    Hire-purchase, Conditional sale or Bill-of-sale arrears
    •    TV license arrears
    •    Telephone, Sky, Virgin Media, Mobile ‘phone arrears
    A non-priority debt is one where the creditor has less power to recover their money, these typically include credit debts such as unsecured loans, credit cards and bank overdrafts. On the face of it these creditors are actually very limited in their powers to recover their money. This is precisely the reason why it is often these type of creditors that are the most vocal when it comes to their recovery action, their main option is to scream and shout for their money through a bombardment of letters and telephone calls. Creditors of this nature can be very persistent, but once you get an understanding that this is their main option you should hopefully be able to restore the equilibrium – a non-priority creditor’s bark is far worse than their bite! Missed or reduced payments can often result in your credit file being affected through late-payment markers and defaults being placed upon it; a golden rule of successfully dealing with your debts is to be resigned to the fact that your credit score is going to fall by the wayside. Any marks or defaults sit on your credit file sit on it for a maximum of six years, so your file will get better again after time. If you would like to obtain a copy of your credit file you can do so by making an application to one of the credit reference agencies: 
    http://www.equifax.co.uk/
    http://www.experian.co.uk/
    http://www.callcredit.co.uk/
    In a worst-case scenario it is possible for a non-priority creditor to use legal proceedings to try and recover their money. This is nearly always via the county court, which is a civil court. The majority of this action is actually carried out via a paper exercise, you wouldn’t usually have to attend a hearing unless it is your intention to defend a claim. There is plenty of information on this website outlining the principles of court action in great detail, so I will not dwell on it here. 
    DEBT COLLECTION AGENCIES AND THE LIKE
    A common ploy for non-priority creditors is to use debt collection agencies to chase for payment. These can be in-house to the original lender (e.g. Metropolitan for HSBC and Mercers for Barclaycard) or third-party firms. The golden rule is that they do not have any further powers to collect payment. They are NOT bailiffs, nor have they anything to do with the courts. If they imply that they are going to send a doorstep visitor you do not have to deal with them. They cannot break in to your property, nor can they take anything from you. They have the same powers as a random person visiting your address, i.e. none. You can tell them to leave, and if they don’t they could be trespassing. Another golden rule, and one that you are likely to see mentioned all over the website, is to NEVER SPEAK TO A CREDITOR ON THE TELEPHONE! Keep all correspondence in writing, it is way more civilised and you’re more likely to get your offers of payment agreed faster. Most creditor collections activity is target-based, the telephone collectors will say all sorts of things to try and badger you for payment. Some can be very aggressive and downright rude. Some may even misrepresent their powers. If you state in writing to your creditors that you only wish to correspond in writing they should adhere to this request. 
    So, now you know the difference between a priority debt and a non-priority debt we can now look to start tackling them! The next part of this guide will discuss the most important part of dealing with debts there is; the budget sheet!
  7. BankFodder
    The single-most important step when dealing with debts is to ensure that you work to a realistic personal budget. This should ensure that you have enough money from your income to cover your essential outgoings such as housing costs, bills, groceries, travelling costs, clothing and health-related costs. Once you have calculated how much these outgoings amount to you can see what is left to offer your creditors. The greatest mistake that is made by individuals is that they ensure that they ensure that they pay their debts in full each month and then try to live on the remaining about of their money. There is insufficient income to make ends meet they will start to use credit to get through the rest of the month, and hence the cycle continues. The only way to start moving to a debt-free future is to break the chain. It should be noted that if your credit agreements are unaffordable you are likely to have to offer your creditors reduced payments, this is very likely to affect your credit score. There are people who are so obsessed with their credit scores that they refuse to admit that they have to make reduced payments, instead they borrow from credit source to satisfy another – and so the debt escalates until they can borrow no more. Borrowing from Peter to pay Paul isn’t the solution. The sooner a workable budget is in place, the sooner the debt stops growing. 
    There is an excellent personal budget sheet on the National Debtline website:
    http://www.nationaldebtline.co.uk/england_wales/budget_sheet.php?country=england_wales
    You may notice that the budget sheet has space to list income from a partner. This isn’t something that you have to include unless both of you have debts that you would like to sort out together or you simply choose to list both incomes. If you wish to include your own income you should ensure that you list your share of the essential outgoings. 
    It is vital that you ensure that the figures you list for your outgoings are reasonable, this is especially the case for items such as housekeeping, clothing and sundries. You can include figures for the likes of satellite/cable television and smoking etc. so long as they are not excessive (e.g. no ‘premium’ channels). The credit industry, debt advice industry and court service have guideline figures that they adhere to – your offers of reduced payment are likely to be rejected if your outgoings are too high. It is also important to ensure that you have enough money to live on, this budget needs to be workable. 
    As a rough example, here are some guideline figures for housekeeping:
    Single person:    £150-£250 per month
    Couple:    £250- £420 per month
    Each child:    £100- £150 per month
    It is also vital that you factor in enough money for the outgoings which you may not pay on a frequent basis, these can include road tax, insurance, MOT, vehicle servicing and TV Licence. You can include nominal amounts for items such as childrens’ clubs, birthdays & Christmas and sundries & emergencies. 
    Do spend a fair amount of time going through your budget, it’s vital that you can stick to the amounts that you have listed; this way your offers of payment to the creditors should also be amounts that you can afford to pay each month. They will want to see a copy of the budget to ensure that your offers are realistic. They will also want to see what other creditors you have and how much you owe them. 
    Once you have calculated how much your essential outgoings come to you should take that figure away from your income. The amount that you are left with is called your ‘surplus’. If you are left with nothing, or a negative figure, don’t panic – you still have options which will be outlined in a later blog posting. 
    If you need further support and assistance with regards to completing your budget please get in contact with your local Citizen’s Advice Bureau or one of the debt advice charities:
    National Debtline:     0808 808 4000
    Consumer Credit Counselling Service:    0800 138 1111
    Once you have got your budget sheet in order you are nearly ready to start approaching your creditors. There is only one more thing to do before that, see the next blog entry!
  8. BankFodder
    Non-priority debts are usually credit debts such as unsecured loans, credit cards, overdrafts and catalogues. These debts are usually the ones which are the easiest to get affordable arrangements with. The reason credit debts are known as non-priorities is due to the fact that the creditors are relatively limited in relation to the powers that they have to recover money from you. The creditors cannot remove something from you as a ploy to get their money. As an example, if you don’t pay your mortgage you could face repossession; if you don’t pay your gas bill the supply could be cut off. Non-priority creditors have nothing tangible that they can take away from you to get paid. Well, that isn’t *strictly* true; they could place late payment or default markers on your credit file which could have a knock-on affect on your credit score. If you are keen on getting your debts sorted you MUST be resigned to the fact that your credit score is going to head south for a while. Your creditors are very likely going to raise the point that they can use legal proceedings to recover their money, this should only be as a last resort. If you ever receive a county court claim-form you should seek further advice as soon as possible. The majority of debt situations are sorted prior to legal action ever happening, you do need to be proactive and act promptly.
    GETTING STARTED
    As I’ve mentioned in step 3, a personal budget is a hugely important cornerstone in dealing with debts. Once you’ve calculated how much money you need to live on you can see if there is any left for the debts. If you have priority debts you’ll need to negotiate affordable instalments prior to addressing your credit debts, once they are sorted any subsequent money will be then used for your non-priorities. The figure that you are left with is often referred to as ‘your surplus’, it should be the amount that you can realistic afford to pay your creditors without scrimping on what you need to live on. Many folks with debt problems soon realise that their surplus isn’t high enough to meet their minimum payments, instead reduced payments should be offered. 
    If you have surplus money:
    This money should be divided up amongst the creditors on a pro-rata basis. This means that the biggest creditor will get the greatest share, and those that are owed smaller amounts would be offered smaller amounts in comparison. Here’s an example:
    Creditor A:    £5,000
    Creditor B:    £3,000
    Creditor 😄    £2,000
    Surplus:    £100
    Creditor A equates to 50% of the total debt, so should be offered £50 per month. 
    Creditor B equates to 30% of the total debt, so should be offered £30 per month.
    Creditor C equates to 20% of the total debt, so should be offered £20 per month. 
    To work out your pro-rata payments, you should divide each debt amount by the total debt amount. You then multiply that figure by the amount of your surplus. Since you are offering a fair and reasonable amount your creditors should seriously consider your offers. The best way to negotiate is ALWAYS in writing, this way you get to keep a copy of the negotiations and also you can enclose a copy of your budget sheet. You should also ask the creditors to consider freezing your interest and charges to stop the debt growing any bigger. You might need to be persistent, it could take several attempts before your creditors agree. You must also ensure that all creditors are included in your offers, you cannot unfairly prejudice one creditors against another – for example you cannot make pro-rata offers on all of your credit cards whilst keeping up with a loan payment. 
    If you have no surplus
    If it transpires from your budget that you have no spare surplus income you should offer your creditors a token payment of £1 per month or so. 
    You can find some template letters on the National Debtline website:
    http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6
    or if you’re in Scotland:
    http://www.nationaldebtline.co.uk/scotland/debt_advice.php#6
    USING INDUSTRY CODES OF PRACTICE TO YOUR ADVANTAGE
    When negotiating with your creditors you may wish to remind them of their obligations to you. There are a couple of handy publications that you can quote from. The Office of Fair Trading’s Debt Collection Guidance outlines all of the unfair practices that wish creditors not to undertake, it has recently been updated and makes clear the type of behaviour that lenders and debt collection agencies should not undertake. 
    You can read the guidance here:
    http://www.oft.gov.uk/shared_oft/consumer_leaflets/credit/OFT664Rev.pdf
    The Lending Code has an entire chapter dedicated to those that may be in financial difficulties:
    http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf
    If you feel that your creditors are flouting their obligations you should request a copy of their complaints procedure, once you have exhausted their internal complaints processes you can take a complaint further to the likes of the Financial Ombudsman Service and Trading Standards. 
    DEBT COLLECTION AGENCIES
    It is often the case that debts get passed on to debt collection agencies, they have no further powers to collect money from you – they are not bailiffs and have nothing to do with the legal system. Often these agencies are in-house to the original lenders; for example:
    Mercers        =    Barclaycard
    Metropolitan        =    HSBC
    Blair, Oliver & Scott    =    Halifax / Bank of Scotland
    The rule of thumb is to treat these agencies in exactly the same way as the original creditors, with the same offers of payment. If they threaten to send someone to visit you they are not bailiffs, they cannot come in (unless invited!) and they cannot take anything. It’s best to send them on their way – ONLY COMMUNICATE WITH CREDITORS IN WRITING!    
    The key to getting reasonable arrangements sorted with your creditors is to be persistent, it might take several letters before your creditors agree to accept your offers of payment. Please also be resigned to the fact that reduced payments will have a significant effect on your credit rating, this will not be forever as defaults and late-payment markers will fall off your file after six years. 
    If you would like some online support to help you deal with your debts, take a look at the new My Money Steps system:
    https://www.mymoneysteps.org/
  9. BankFodder
    It is possible to categorise any type of debt in to one of two types. Priority debts are the more important ones as non-payment of these could cause you to lose something. Examples of priority debts include mortgage or rent arrears, council tax arrears, utility arrears (if the arrears are with your current provider) and magistrates’ court fines. Some priority debts come with somewhat draconian enforcement possibilities, some can even lead you to prison for non-payment. You should always ensure that you set up arrangements with your priorities before making arrangements with your non-priority credit debts. I could spend weeks writing about this vast area; instead I’m going to link to excellent information that has already been written by National Debtline. 
    So, in a nut-shell, priority debts are the ones which could affect:
    •    Your property (including the roof over your head)
    •    Your utilities (although you cannot be cut-off for non-payment of your water arrears)
    •    Your liberty 
    Although priority debts may take a little more work to get sorted it is more than possible to get affordable arrangements sorted in no time at all. What follows are links covering the various different types of priority debts that there are (all courtesy of the National Debtline website)
    Priority debts as a whole:
    England/Wales:
    http://www.nationaldebtline.co.uk/england_wales/pdf/self-help-pack/step-3-dealing-with-your-priority-debts.pdf
    Scotland:
    http://www.nationaldebtline.co.uk/scotland/pdf/self_help_pack/priority_debts.pdf
    Mortgage Arrears:
    England/Wales:
    http://www.nationaldebtline.co.uk/england_wales/guide.php?page=guide-mortgage-arrears
    Scotland:
    http://www.nationaldebtline.co.uk/scotland/pdf/self_help_pack/mortgage_arrears.pdf
    Rent Arrears:
    England/Wales:
    http://www.nationaldebtline.co.uk/england_wales/guide.php?page=guide-rent-arrears
    Scotland:
    http://www.nationaldebtline.co.uk/scotland/pdf/self_help_pack/rent_arrears1.pdf
    http://www.nationaldebtline.co.uk/scotland/pdf/self_help_pack/rent_arrears2.pdf
    As you can see from the links, priorities are a massive area. If you are struggling with any of yours you must seek advice straight away.
  10. BankFodder
    Ensuring that your debts remain under control is a task which requires a pro-active approach. It is usually the case that your financial circumstances will change as time goes by. These changes will have a knock-on effect with your personal budget. To ensure that the arrangements with your creditors do not fail it is vital to ensure that you frequently revise your income and expenditure so that you can adapt. At the moment fuel costs are slowly increasing, this places additional pressure on your outgoings and could mean that you have less surplus to offer to your creditors. So long as you stick to a realistic budget and stick to the advice given in previous blog posts you should be able to amend your offers according to the changes in your circumstances. 
    If there is an ongoing likelihood that your financial circumstances will fluctuate significantly you should always choose an informal method to deal with your debts – such as the self-negotiation route or a Debt Management Plan. The key issue with choosing one of the more formal and finite options such as an Individual Voluntary Arrangement is that they could fail – which could put you in a worse position than when it began. Those that are the best at dealing with their debts are the ones who are constantly keeping an eye on their budget as if it was an organic entity. You should not be afraid to contact your creditors to alert them of any changes, they will appreciate you keeping a close eye on your situation. 
    Creditors will often contact you every now and then to see if you have had a change in your financial circumstances, even if things are precisely the same as before you should still send a budget to them to show them that this is the case. Although managing debts in this way can sometimes be a little repetitive it should prevent any further action from being taken against you. The key to effective debt management is to set realistic goals and to assess them from time to time, once you have got the approach sorted you’ll notice the light at the end of the tunnel will start to get bigger and bigger. 
    The ten steps is only the beginning of this blog, please keep an eye on it as we’ll be expanding it and will also cover various specifics over the next few months!
  11. BankFodder
    Debt can be a very taboo subject, many folks don’t like admitting that their finances are unmanageable. People can fall behind with their commitments for all sorts of reasons, the most common being loss of employment income, a relationship breakdown or illness. It is a common misconception that most debtors have simply lived way beyond their means. Although there are people out there who have borrowed more than they knew they could afford, these people are actually very few and far between. This guide offers a starting point to help those who are struggling to get back on track. It’s a ten-step guide which, if followed, will get the ball moving in the right direction. 
    STEP ONE – DON’T PANIC!
    Facing up to your debts can be a very frightening experience, much of which is simply the fear of the unknown; hopefully this guide will alleviate many concerns that there might be. There is plenty of help on hand, not only from this very forum but others like it, and also through a large network of debt advice charities and institutions – all of whom are very knowledgeable and helpful. Watch out though, as there are hundreds of commercial firms out there to make money from your situation, some even masquerade as charities or free advice agencies. If you are looking to seek assistance these are the organisations that I recommend:
    National Debtline: 0808 808 4000 // www.nationaldebtline.co.uk
    Consumer Credit Counselling Service : 0800 138 1111 // www.cccs.co.uk
    PayPlan: 0800 280 2816 // www.payplan.com
    Citizen’s Advice Bureau: www.citizensadvice.org.uk
    Northern Ireland only >> Advice4debtNI: 0800 917 4607// www.advice4debtni.com
    There are plenty of folks who are dealing with their debts right here on the Consumer Action Group, take time to have a read of their stories and what they have done to work towards a debt-free life. We have a fantastic community here with some very knowledgeable members – get involved! As far as debts are concerned there is not a situation which cannot be sorted, some may take a little longer than others but ultimately there is always a workable solution. It is vital not to bury your head in the sand, debts seldom disappear, and the sooner you make the first step the sooner things will start to more forward. 
    MAXIMISING YOUR INCOME
    Lots of people are in debt because they don’t receive all the money they are entitled to. It’s really important to ensure that you are maximising your income by claiming all you are entitled to. Here are a few pointers:
    Tax: Check with your local tax office to ensure you have the right tax code, a surprising number of people are not!
    National Minimum Wage: As of 1st October 2011 this is £6.08 for an adult aged 21 or over, up to then it is £4.98.
    There is a range of different benefits which you might have an entitlement to, this will depend on your particular circumstances. Some benefits are means-tested which means that your entitlement would depend upon household income. Some benefits are non-means-tested which means that you may have an entitlement regardless of income, these are usually sickness-related benefits. You can find out more about benefits and possible entitlement by visiting one of the following sites:
    www.entitledto.co.uk
    www.direct.gov.uk
    www.jobcentreplus.gov.uk
    www.turn2us.org.uk
    www.dwp.gov.uk
    www.thepensionservice.gov.uk
    www.hmrc.gov.uk/taxcredits/index.htm
    Other Income: If you have grown-up children or other relatives living in your house make sure they are paying enough towards the household expenses. If you have a spare bedroom you can rent it out for a maximum of £4250 a year without having to declare it for tax purposes (it may affect benefit entitlement). Ask you tax office about the rent-a-room scheme for more information. You may also be able to request assistance from The Social Fund, this could be for essential household items or help in an emergency. If you’re looking to improve your home you could see if your local council give grants for improvements. There is also a range of grants available for insulation and draft-proofing, central heating. These are dependant on your age and if you’re in receipt of any benefits. For more information please call the Energy Trust on 0800 512 012.
    If you’re over 60, you will usually be entitled to a lump sum every year called the winter fuel payment, give the helpline a call on 0845 915 1515.
    Finally, it might be worth selling anything you do not need. You will be surprised how much you could make from getting rid of tat on E-bay or via a Car Boot Sale.
    These ten steps give a brief introduction to the options you have available to manage your debts. There will be parts of the guide which will only be relevant to those living in England & Wales, some parts will cover Scotland and some for all areas. At this time Northern Ireland will not be covered – you can get advice for that area via the following website:
    www.advice4debtni.com
  12. BankFodder
    If you do structured exercise - meaning regular exercise either in a Gym, or on a machine - or outside, walking, running or swimming etc as part of a programme in which you have goals to reduce weight, improve heart function etc - then quite frankly, you need a heart rate monitor and you need to understand the principles behind it, why you are using it and how to use it.
    I don't think that it is possible to undertake a structured exercise programme without an HRM.
    The best way to understand how to use an HRM is to read a book about it. When I started using one, I had a look at quite a few books and the best one that I found for understanding how to put a heart rate monitor to best use was a book by Joe Friel - Total Heart Rate Training which I have linked to Amazon.
    It's a small book and only a couple of chapters really deal with how a heart rate monitor works - so there is not a lot of reading to do if you don't want to.
    There is a Kindle version - but for me, a paper version is better when I want a reference book - as opposed to a story book, where I merely want to go from beginning to the end and then finish the book.
  13. BankFodder
    Back to the grindstone.
    Francoise is French. She is a professional ballet dancer and used to dance at the Opera in Paris. Well over 50 but very very fit, very blonde with very terrific facial definition.   And very fit. Everything you would expect from a ballet dancer, I suppose - or from a female Gestapo officer. I sort of dream of her in a trench coat, peaked hat and monocle and ordering me to do strange things with my body. I wake up and it's not a dream!! - except for the uniform etc.
     
    Today I am totally disoriented. I had really started getting quite used to the routine and the music. I was feeling comfortable and I knew where I was. Now she's changed the whole thing. New music and new moves - and it seems to me that it is much more demanding. Today was the first day of the new routine and so Francoise went over it in small chunks, demonstrating and then letting us have a go with the music. I don't know if it was only that I wasn't used to it but I found all the movements much brisker and more finicky - in fact they hurt more. But all of the women - meaning everyone else - seemed to take it in their stride. Carla wasn't there this week. Maybe she is charging her phone batteries.
    Anyway, I saw it through but most of the time I was making mistakes and playing catch-up - far worse really than my first time ever.
    What worries me is that half of today's session was taken up with explanations. What on earth is it going to be like next week when she goes through the whole routine in one go? I'm getting really scared. Why did she have to change it? It isn't actually meant to be fun is it? You are just meant to get through it. Now I may even have difficulty doing that. The leg stretching is getting really insane. I'm going to need surgery if it goes on like this. I reckon that the women can do that bit more easily because they have less kit in the perineal area - if you know what I mean. It stands to reason doesn't it. There is nothing joining the two sides so they can do the splits more easily. Why don't they explain this stuff to you before you start. Instead I have to work it out for myself.
     
    If there is a man standing alone in a forest and there are no women there in the forest........is he still wrong?
  14. BankFodder
    This time I went on a Friday. Someone, I can't quite remember who - but someone pretty important anyway, died on a Friday but it wasn't so bad because he was back again by Sunday.
    I'm not sure if I will make it back that quick.
    I'm really struggling to see the connection between exercise and sexual health. http://news.bbc.co.uk/2/hi/4703166.stm
    Take me for instance. Just an ordinary bloke, wanders into a room with 20 or so women all dressed in swimsuits and tights - or something like that anyway and all moving round in very interesting ways. I start to strut my stuff and we're all in the rhythm together - well I might be a bit behind - and in less than 10 minutes or so (well, maybe 5) I'm almost done for and don't care who they are or what they're wearing anymore. What's all that about then?
    No wonder most geezers like to get It over with as quickly as possible and then go to sleep. If they had to go on any longer I doubt that whether there would be any human race. This is not laziness or lack of consideration. It's certainly not survival of the fittest. It's survival of the quickest. It is evolutionary self-interest - pure and simple. 
    I'm sure I must be on to something here.
    I must say that all of this French stuff is very confusing. Why can't they just say it in English? Air Traffic Controllers do - otherwise all the aeroplanes would keep on crashing into each other. It certainly gets me confused. I mean I didn't understand why for the past 2 weeks, Francoise (even a French name) kept on saying "pantalons, pantalons" to me which is French for trousers as any schoolboy knows. It was only today that I found out that she was saying "point, talons. Point, talons" which means Toe, heel. Toe, heel. (You've got to say "point, talons" with a french accent to see what I'm getting at. Try saying "pwant, talons" and you've got it).
    Anyway, when I realised I burst out giggling in front of everyone. They all looked at me like I was nuts.
    I mean to say, now it makes much more sense doesn't it. I'm doing foot stretching when she says it and there doesn't see to be any special reason why she should say "trousers". It's all a bit clearer now - but how was I to know at the time?
    I'm sure that Cecelia, by ex-ballet-dancer girlfriend couldn't speak French, but then I'm starting to understand that there may have been a lot of things she didn't let on.
    I still don't see how I'll ever to be able to stretch my legs in the way that they can. And I still can't seem to get into the rhythm very well. I always seem to fall out of step very quickly and often I find that I'm on the wrong leg or the wrong side or lifting the wrong arm. That's when I forget to look at Francoise directly but look at her reflection in the mirror instead. I forget that everything is reversed.
    One thing that I do notice although maybe it's my imagination. My abdo's may be getting a little bit easier - meaning that I can hold the positions a little longer than I could the first couple of times I went.
    Wow, maybe I'll get a six-pack!!!
  15. BankFodder
    The whole business of using a heart rate monitor is about knowing what is your maximum heart rate and then exercising in a way which gets your heart beating to a certain percentage of that maximum.
    Most books talk about heart rate zones
    This means: –
    zone 5 - >91% HR max zone 4 - 83% to 90% HR max zone 3 - 75% to 82% HR max zone 2 - 66% to 74% HR max zone 1 - 60% to 65% HR max  
    Some books talk about 6 zones - divding the >90% HRmax into two zones. Some books divide zone 5 into a, b, c
     
    If you don't know what your maximum heart rate is, then you start off using a formula. There are several formulas. The one that is most often used seems to be – 220 minus (your age). This means that if you are 40 years old, your theoretical HR max would be 180 bpm (beats per minute).
    The way it works is that by using your heart rate monitor to make sure that when you exercise you are making your heart work at a certain level – within certain training zones - you will be able to set achievable goals rather than merely exercising until you feel that you had enough and want to do something else.
    Another advantage of this is that the structure makes it more interesting to exercise, because frankly walking or running on a treadmill for an hour can be pretty boring and using your heart rate monitor gives you something extra to do.
    Of course the theoretical heart rate maximum – is just theoretical. You want to get away from that as quickly as you can. You do this by finding out your true maximum heart rate.
     
    This is done by having a training session where you raise your heart rate so high that you are on the verge of falling over, your eyes glazing over and you really just can't go on. Whatever your heart rate is at that point is your HR max. It may be more than your theoretical maximum – it probably will be – but it could be less. Whatever is your true HR max then becomes the anchor of the other zones and and you alter your training accordingly.
    Most heart rate monitors will allow you to set your own maximum heart rate into it and then recalculate your zones for you.
    Here's a warning: be careful when you try and find your maximum heart rate. You should probably have gone through several weeks of good regular exercise at no more than 80% of your theoretical maximum. You should have had several days break from your last exercise session.
    If you are at a gym then you should probably let somebody know that you are going to do this and they should be in attendance. If you are doing this outside, then you should make sure that someone else is with you.
     
    To find out what you should expect to achieve by training within each particular heart rate zone you should read a book or have a look on the Internet. There is lots of information about it.
    If you use a gym, then you will probably find that the gym equipment – treadmill, exercise bike, elliptical cross trainer etc are equipped with heart rate monitor receivers. This means that if you wear your heart rate monitor chest strap, the exercise machine will display your heart rate on a screen. This is much better then having to grip heart rate sensors with your hands every so often. It is much more useful – and much more interesting – having a constant view of what your heart is doing and setting your own program.
    When I use a gym, I find that most of the people who are using the exercise equipment are not using a heart rate monitor and are not using the heart rate monitor functions of the machines.
    Those who do use a heart rate monitor scarcely ever understand what it all means.
    I really don't understand how they can have any meaningful exercise program.
    At the very least, I don't think it is possible to get the best benefit out of the time spent doing the exercise.

    Do you measure your increasing fitness by reference to your heart rate? Yes you do.
    However, it has nothing to do with your HR max (maximum heart rate). Your HR max is simply your maximum heart rate. It is pretty well fixed throughout your life although it decreases by a beat per minute also for every year you get older. Some people might think that having a high heart rate is a great sign of fitness. It is meaningless.

    What does change we fitness is your resting heart rate – RHR.
    As your heart muscle develops and becomes more effective, you need fewer beats to pump the same amount of blood round. What you should do is check your resting heart rate every week or two and see how it decreases.

    If you are exercising methodically and exercising in an appropriate heart rate zone, you should over time find that your RHR goes down. This is one of two or three tests of improving fitness. A top world athlete might have an RHR 35 bpm. A couch potato/slob might have a RHR of 55 bpm.

    To check your RHR, you should have a good night sleep and when you wake up and fully relaxed and not moving around you should check your heart rate. That should give you a good idea of your RHR.

    A second heart rate related test of fitness is your recovery rate.. You need to measure your recovery rate after exercising briskly. After ending your exercise, you should check your heart rate at one minute and then at two minutes.

    You measure your heart rate recovery times by taking your heart rate before you start exercising, then exercise so that you bring your heart rate up into zone 3 (above). Measure your heart rate immediately you stop exercising, then at one minute and then again at two minutes.

    You should hope that your heart rate decreases by about 15% after one minute and by a total of about 20% of the two minutes. If you can do better than this then you are starting to achieve a high level of fitness. If your recovery rate is less than this then you have work to do.
  16. BankFodder
    Another week has passed. I feel as if someone has been trying to pull my joints apart on a rack so I think that it must be Monday. I'll check .... Yes it is Monday.
    Half the battle - maybe more than half is simply trying to follow all the movements at the same time. One half of my brain deals with my legs, the other half deals with my torso but then when I try to tell my arms what to do I almost fall over. I think that I need a RAM upgrade.
    What about the splits? How do they do that. Can any man do it? I finally understand why men are unable to have babies. It's nothing to do with not having a womb or the Crown Jewels getting in the way - it's just that we aren't built to do the splits - and I spent most of life thinking that it was more complicated than that. So much for British school biology education.
    And it's all in French. How did that happen? The language of business is English and so is the language of science. But the language of pain and torture seems to be French and I always thought that it was German.
    "Glisser" (Glissade) brings tears to my eyes as it would to any animal with a wishbone. I'm sure that I heard a "ccrrack!" this morning and it certainly feels a little sore in the wishbone area (know what I mean?).
    My mum was brought up in France and as she developed Alzheimers she reverted to French. She started to speak French to my father who has never understood it and in fact she started to speak French to anyone who came near her including me who she started to address as "Vous" and "Monsieur". My very elderly aunt who liived in Boulogne also had Alzheimers and she also was speaking French. Blimey, maybe speaking French could be a symptom of Alzheimers. I might be on to something important here. I'll watch out for it the next time I go to France.
    That's another thing, the stretching class was so full this morning that it got very crowded at the bar - and I'm not talking about the pub, either. What it did mean is that every time you finished your "plie", then swing your leg back and do your "battement", you were likely to catch one in the nether-lands from the person in front of you which could be quite nasty for a geezer - especially in front of all those gals. I nearly did on one or two times but I saw it coming and dodged. Amazing how when it comes to that sort of thing you can always make a very rapid reallocation of one of your brain halves for a bit of genealogical salvation - if you get my drift. In fact it was the same woman who nearly caught me more than once and I looked into her eyes to see if she might have being doing it on purpose but I think that she didn't mean anything by it.
    Anyway, it was soon over. The hour seems to pass by more quickly this time than it did for my first class a week ago. I wonder how long it takes before it feels easy.
  17. BankFodder
    Well I've just come out of my second fitness session. 
    Bloody Hell! (Am I allowed to say that?)
    I was the only bloke there. All the rest were women between 40 and 60 yrs but next to them I felt like some broken down wreck. How did I let myself get this way? I'm so ashamed.
    The classes are called "stretching" and for an hour I reckon that you test out every joint and every ligament and to begin with it feels like low impact but after 40 minutes, the full impact starts to hit you - and there's still 20 minutes to go!!!!
    The classes are in a ballet school - dunno if that makes a difference but the school is lead by a top class pair of dancers who have now retired but who were in the top flight at the Opera in Paris - which strangely enough is not opera but ballet. What it does mean is that every movement has a flair to it and there's lots of twirling of hands and keeping the pinkie out and very elegant movement and pointed toes - all very controlled. I used to go out with a ballet dancer once. I din't know that she could do all this stuff!
    Anyway, it hurts. Not the first one too much - just a tingling but this one three days later was much more difficult and I suppose that my body is still trying to recover from the first one. I wonder what it will be like next week. I suppose that it will still get a bit worse before it starts to gt better.
    At least I don't have to wear tights like the girls do. I just wear a tracksuit bottoms and a T shirt. Don't have to show off my lunch. (Am I allowed to say that?)
    I don't know how I'm expect to stretch my legs the way they do - and I can only get my leg up to the bottom bar but even the older ones have their feet up on the top bar. Are females more supple than fellas?
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