Let’s talk about debt
By Mr Bankruptcy
27th November 2024
How do you raise the subject of debt with someone you know or love?
We like to think that in these modern times we can talk about the most intimate matters with people we care about. Barriers to some taboo subjects such as mental health or sex are being broken down all the time. But there is still one subject that can be off the table, even with someone close, and that’s debt.
The embarrassment around money talk
People are often embarrassed in this country to talk about money, even when they’re doing well; we are even more reticent when it comes to money problems.
I’m a professional debt advisor so you may think that most of my job entails sitting people down and talking to them about their debt problem and explaining their options. In fact, much of my time is spent listening. This requires me to create the right atmosphere during interviews and asking the right questions to get the information I need.
However, at least I have the advantage that the people I talk to have already accepted that they have a debt problem they can’t handle and that they want to do something about it.
But if they aren’t there yet, it’s very difficult to bring the subject up if you suspect someone you know has a problem. What if you’re wrong and they are offended? What if they get angry and shut you out? Do you accept their denials and let things get worse?
Some tell-tale signs of a debt problem
Firstly, here are some warning signs which could indicate a debt problem:
- Changes in behaviour. Someone may have become quiet or secretive; equally a reserved friend may start acting like the life and soul of the party as a smokescreen to hide their anxiety.
- Spending habits. Does someone you know routinely spend beyond their means, splurging on holidays or designer gear? Alternatively, are they using the bus, having just sold their car, or making excuses for not going out?
- Denial and evasion. Is your other half avoiding opening bills, leaving them in a drawer or putting them in the bin unopened? Do they avoid talking about money or are they afraid to answer the phone or front door?
- Mental health. Are they withdrawn and anxious, or tired through lack of sleep?
- Surviving on credit. Is someone you know only getting to the end of the month by borrowing from mates or maxing out their credit card?
We all live with some debt, but if we’re in control it’s not a problem. However, spotting these signs can justify you raising the subject with someone you care about.
Starting the conversation
You know your friends better than I could and will have a better idea about whether a gentle approach or a blunt, honest one will work better. Here are a few openers you can try:
- Is everything OK?
- I’ve noticed you look worried. Is there anything you want to talk about, or that I can help with?
- I’ve had debt problems in the past. If you want to talk, I can sympathise.
- I know organisations that help or offer advice about debt. Do you want to know more?
Often, the most important thing is to simply make time for them. Put the kettle on, make them feel safe speaking to you and reassuring them that you aren’t going to be judgemental or embarrassed and that they aren’t alone with their problems.
We can’t all be expert debt advisors
Your friend, partner or loved one may have finally opened up, so now may be the time to signpost them towards getting professional help, from someone trained to give impartial advice or help, whether that’s about finances, mental health, or both.
It’s important to remember that you aren’t an expert and shouldn’t be giving financial advice or offering simple solutions if you aren’t accredited by the Financial Conduct Authority. But rest assured that you have already achieved the hardest part.
Mental health and debt
We talk a lot about mental health, but debt is a large contributor to stress and depression. It takes courage to admit you’re in financial difficulties – especially to a business partner or loved one. Helping them to take the first step and open up, then offering your support can give them what they need to start the hard work of digging themselves out of the situation until they can see the daylight ahead.
James Rosa Associates
Even when it seems that there’s no way forward out of serious debt, there is always support available to help you understand the options available to you or your business.
James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt and are looking for a solution. We also help anyone involved in a civil or commercial dispute.
Our range of services include:
We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
Find out if you qualify for a free debt consultation
If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, then contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk and find out whether you qualify for our free consultation service.
Bankruptcy – it’s not the easy way out that some people think
By Mr Bankruptcy
15th November 2024
A few years ago you, couldn’t switch on the television without seeing a TV money guru urging some young person or family to get a grip on their spending and control their spiralling debts.
The subject of the programme would be young men and women in modestly paid jobs living well beyond their means, eating out and socialising every night because their friends were important to them.
But every month, they would only pay the minimum interest off their credit and store cards, not realising that the principal debt was rising higher and higher until they owed tens of thousands of pounds.
Then the youth person would just say: “No worries, I can just go bankrupt and get rid of all my debts.”
There was definitely an idea among young ‘anti-capitalists’ in the recent past, possibly before the reality of hard times kicked in, that they could ‘stick it to the system’ by racking up debts and then walking away.
Ironically, bankruptcy as an idea is, in my view, one of the biggest contributors the Victorians made to the capitalist system, boost entrepreneurialism by taking away the threat of prison if their business ideas failed.
I’m not having a go at young people here. No-one gets much of an education about finances and credit before they leave school into a world that’s trying to get them into debt. It’s a complicated subject, which is why debt and bankruptcy advisors exist.
But if the consequences of bankruptcy were better explained to individuals, they might realise there are often better ways of sorting out their debt problems, in a more responsible way. Filing for bankruptcy isn’t always the golden solution.
There are disadvantages to bankruptcy
There’s a number of things you should know about before you decide to file for bankruptcy:
The cost. You have to pay a £680 fee when you submit a bankruptcy application to the Insolvency Service.
The publicity. All personal bankruptcies must be advertised, so people you know may read about it. Also, if you want to borrow £500 or more while you are declared bankrupt, you have to tell the lender, whether it’s a business or an individual, about it.
The restrictions. If you were a company director, you can’t hold that position any more (whether formally appointed or not – i.e. so called “shadow directorship”) until you’re discharged from bankruptcy. There are also restrictions in some professions, such as (e.g. finance, gambling, the police, security). Neither can you hold certain positions within the community, such as magistrate, school governor or charity trustee.
Your finances. All of your assets get put into the hands of an Official Receiver/Trustee in Bankruptcy to repay creditors, including your home. Your credit rating is affected and you will find it harder to get credit until you are discharged from bankruptcy.
The benefits
However, there are positives to filing for personal bankruptcy that might outweigh the negatives. It’s quite a straightforward procedure and you can get help to take you through it from a bankruptcy advisor.
The period of restrictions only last for 12 months (unless subject to a Bankruptcy Restriction Order) and, most importantly, all of your debts are written off and creditors can no longer chase after you for their money, so at the end of the process you have a fresh start.
Alternatives to bankruptcy
There are alternatives to going down the bankruptcy route that may be better suited to your circumstances:
- Debt Relief Orders give a period of relief from creditors to get your finances into shape. At the end of the period, you may be freed from all debts and they don’t require going to court, so the process is more private.
- An informal arrangement in which you come to a compromise with creditors. This may include a timetable for paying all or some of your debt back. However, it’s not binding on your creditors, who might still demand full repayment.
- Individual Voluntary Arrangements are a kind of informal arrangement that starts with a formal proposal to creditors. you will need an insolvency practitioner to prepare a report for the High Court, but any agreement is binding on creditors.
- If your total debts come to less than £5,000 an Administration Order can be made against you by the Enforcement of Judgements Office (EJO) by a creditor. You are bound to make regular payments to the EJO which go to your creditors, so you need a regular income. If you can’t keep them up, you can apply to change the order, otherwise you come under the same restrictions as for bankruptcy.
The next steps
There are always ways to deal with unmanageable debt, some you may not be aware of. Debt advisors exist to look at your circumstances and lay out the options available to you.
Debt is stressful but there’s always support available, whether it’s from friends and family or professional advice. Sharing your burden is the first step and it’s good for your mental wellbeing. So, your next step should be to reach out, or pick up the phone.
James Rosa Associates
We are a firm of debt advisors and debt adjustors with years of experience. We offer a supportive, non-judgemental and friendly service for individuals and business owners/directors facing unmanageable debt and want to do something about it.
Our range of services include:
We are also authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
Find out if you qualify for a free consultation
If you want to deal with unmanageable debt or bring a dispute to a swift and cost-effective resolution, then contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk and find out if you qualify for one of our free consultations.
Do you need to arrange an interview with a debt advisor?
By Mr Bankruptcy
1st November 2024
It’s good to talk and share your problems, but it’s a big step to take when your problem is an unmanageable debt.
As a debt advisor, I’ve talked with many clients about debt. Some are delighted to have a professional they can share their burden with. However, others I’ve seen are more reticent, embarrassed to find themselves in the situation and reluctant to come forward.
However, it’s important to take that first step, firstly as a sign that you have agency to deal with your problem. Secondly, I need to talk at length with my clients before I can help them in a meaningful way.
Exploring a road map out of serious debt
Debt advice is very much a bespoke service because no two situations are ever the same – I need to find out all about their personal circumstance and the nature and scale of their debt problems in order to start helping them find their own way out of their problem.
An effective debt adviser will be able to analyse your current circumstances to establish the best options available to help you manage your debts, so it’s critical that you are totally honest and upfront with the information you give them.
Initial steps towards easing your situation
Every debt advisor has a slightly different approach, but usually they will want to explore initial courses of action during your interview:
- Improving your current financial situation by exploring ways to increase your income (which may include referring you to a benefits adviser) and calculating your total expenditure in order to identify areas in which you can make savings.
- Spotting the ‘closest crocodiles to your canoe’ – i.e. identifying any pending financial commitments, priority debts or potential emergencies that need dealing with urgently.
It may then be possible to look at consolidating some debts or switching them to a lower interest rate. With your approval, a debt advisor can also approach creditors and try to negotiate a solution with them.
They may be willing to give you some breathing space in which to get onto a better financial footing so that you can start making repayments again (or a debt advisor can organise that for you). They may be persuaded to reduce or stop charging interest, give you a time extension or even write off some of the debt.
It may seem unrealistic to even ask right now, but I find that many creditors are willing to be flexible if it means getting back some of their money rather than none at all. However, they will want to see a realistic repayment plan, which requires you to give your debt advisor a complete and accurate picture of your situation.
Specialist and legal support
A debt advisor can point you towards specialist advice on legal issues, such as dealing with legal action or complaints against you or filing for bankruptcy.
Neither do we forget the personal toll this can take on an individual and their families. We are also there to offer some moral support in a difficult time, and recommend services or charities that can offer you and your family advice, counselling or assistance.
Preparing for your interview
As I wrote in a recent blog post, it’s important for the client to be prepared and have all the information that a debt advisor needs to help you move forward.
You may not have been able to see a way forward before you decide to see a debt advisor, but if you are willing to take that first step and be open and honest with your chosen debt advisor, then you will benefit immensely, emotionally and materially.
A good debt advice interview will help you understand that there are options available to you and to your business, so that you can be more confident about moving forward and navigating yourself out of your debt problem.
James Rosa Associates
James Rosa Associates is an established company of debt advisors and debt adjustors which, over the years, has built up a reputation as a supportive, non-judgemental firm which understand our clients.
If you are looking for solutions and are prepared to take the first steps, then we provide a full range of advice and professional services, to both individuals and business owners/directors with unmanageable debt. We also help people or companies involved in a civil or commercial dispute. Our range of services include:
We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
You may qualify for one of our free consultations
If you want to deal with an unmanageable debt or bring a dispute to a swift and cost-effective resolution, you may qualify for one of our free consultations.
Take the first step by contacting James Rosa Associates, ringing 0845 6807217 or emailing enquiries@jamesrosa.co.uk and asking about our services.