iMoneyManager

iMoneyManager is a tool you can use to wrap your head round a debt problem, work out an affordable payment plan, and communicate that plan to your creditors, all in private, without needing to share your situation with anyone.

Most of us want to try to sort out our problems alone. We don’t want to admit defeat before we’ve even started. If you’re worried about debt or finances, iMoneyManager helps you do this.

If after completing your iMoneyManager you do need further help, then there are plenty of advice services, free and fee charging that are more than able to help, but whatever your situation, iMoneyManager is a good place to start. You can see how serious the problem is, and if you do need to talk to someone, you’ll understand your situation, know how much you can afford to pay each month, AND know how long it would have taken to pay back the debts.

All in all, it puts things in perspective.

Have a look around. Get involved, ask questions, this Blog is a two-way thing, not a promotional website. Read the story behind the software, more about us, our testimonials. Welcome to iMoneyManager…

James & Miriam

Let’s face it, not many people really like to enter numbers into a computer, so we’ve tried to make it as easy as possible by giving you a checklist to go through before you start. The idea is that by going through the checklist and gathering all the documentation you need to fill out iMoneyManager quickly and easily, it will speed the process of getting to grips with your household finances.

You should have received a link to the document in your first email from us, if you didn’t or you need it again, just download it from here. 1_Paperwork_Checklist_for_iMoneyManager

Before you start using iMoneyManager there are some important things you should be aware of.

The first thing is, there is a way things should work and a way that they actually do. What I mean by this is; you can prepare and present everything that is needed to competently present your circumstances and affordable offer only to find that some creditors will unnecessarily (it will seem) make things more difficult than they need to be.

So, here are a couple of pointers that should prepare the ground for you.

DID YOU KNOW?

Did you know about something called “The Right of Set Off”?

What this means is; you can have your money in your bank account, all carefully budgeted to pay your creditors their affordable amount, if you have a credit card or loan with the same bank, they can take a full payment from your account without your permission, even if you’ve told them you can’t afford it.

For more information on this you can see this article written by the Financial Ombudsman Service: Click Here

That obviously is going to mess your careful budget up quite a lot.

So you can enter your information into iMoneyManager, get feedback from the software, play around with your numbers to your hearts content, but if you have a bank account with one of your creditors, you should set up a ‘parachute’ account first. What is a parachute account?

A parachute account does what is says on the tin. Basically you set up a new bank account unrelated to any debts you currently have. This account is therefore unaffected by any negotiations you may be going through with your creditors.

moneymadeclear.org.uk put together a useful document on basic bank accounts. It was published in November 2009 so should not be too out of date. Download it HERE.

Before you start getting to grips with your debts there are some thing you need to know.

Firstly your situation will fall into one of the following categories:

1. No real problem, perhaps simple adjustments to your household budget (i.e spend less, bring in more). You can afford to maintain payments to your creditors (the companies you owe money to).

2. You’ve tried to adjust your budget but it still won’t fit. You can afford to make payments but they aren’t as big as you’re being asked for, however you can still pay off your debts within a reasonable period of time.

3. You’ve done your figures using your iMoneyManager, and when you see how long it will take to pay off your debts, your chin hits the floor. The repayment period is so long you can’t see yourself achieving it.

No.1 is obviously good news. You can keep things going and iMoneyManager will tell you how long it will take to clear your debts, you have a goal.

You’ll probably find No. 2 a bit more concerning. It means you’ll need to contact your creditors and negotiate lower payments. Don’t worry iMoneyManager sorts all that out for you. We’ll get to that in a bit.

If you fall into category No.3 you will understandably be worried. Yes, you are in a tough situation, but there is always a solution. We’ve helped well over 100 people through the most extreme solution there is for this situation, personal bankruptcy, and we, and our past clients can tell you, it’s the fear of the unknown that is far worse than the reality.

Our job is to walk you through these three scenarios, giving you the information you need, so whichever one you are in, you can find the best way forward for you.

Once you’ve logged in using your username and password, your iMoneyManager will open to this screen. The opening screen shows no information entered and invites you to click ‘Next’.

Click on picture to see full size

Don’t worry too much about the detail here, it will all make sense as you begin to enter your information.

Your iMoneyManager has a built in AutoSave feature. This means that every time you leave a box it will save your information. So don’t worry about losing your info, just plug everything in, close down when you’ve finished and next time you open it up, your information will be just as you left it.

To help the software order your information the right way, you need to tell it your name/s to begin with. Just enter your first name.

Do you have a partner? If so a quick note on when to enter their details and when not to.

As a general rule, even if your partner has no debts, you should include their income, as the expenses you enter will include their costs to the household too. This doesn’t mean they will be brought into the negotiations too or be contacted by your creditors, and they are not liable for your debts, it’s just the way things are worked out.

Click on the picture for a bigger view

There could be exceptions to the rule but they are few and far between, if you want an example blog a request below.

I’m revisiting this again, because this is one of many examples of where there is ‘devil in the detail’.

Unfortunately this is exactly what makes it hard to deal with a problem alone. It’s not impossible though, and by knowing some basic facts you can prepare things in a way that ticks all the boxes.

So, back to the question: Do you include your partner in the presentation of your finances?

In law you are not responsible for your partners debts, and your partner is not responsible for yours. Whether you are married or not it makes no difference. So logically you would think that when you prepare your information to send to your creditors, the information would relate to you and you alone.

But, and this is where strange rules make things complicated, if you were to go to a money advisor, they would tell you that you should present your partner’s income on your financial statement. Creditors have come to expect it too.

Is this fair? Well if it’s your partner trying to solve their debt problem and they have lots of debts and you have none, then no, not really. Your partner’s creditors will expect you to spend less in order to help pay off their debts.

The problem is, trying to find a solution to a debt problem when most couples share expenses and pool income, gets really complicated if you try to do it by looking at just one person’s income and expenditure. Plus the majority of couples when they do get into financial difficulty generally get into difficulty together.

Therefore the general rule is that you present your partners income and expenditure alongside yours. iMoneyManager is set up to allow you to do this. Our view is that to be fair to your creditors, if your household has benefited from the credit they’ve provided, then your household should contribute to its repayment.

Although we are not an advice service; in the past we’ve always recommended people involve their partners in their debt problem even if it’s difficult, but the decision is always yours. If you don’t feel you can do it for whatever reason, it’s probably best to seek some specialist advice.

Click on the picture for a more detailed view

Firstly you need to enter details of all the income you have into your household that is Earned. This would be from a full-time, part-time or self employed job. For most people it will be the main source of income.

All the information you enter will be converted to monthly figures automatically. This means you can just concentrate on entering the amounts as you are used to dealing with them.

In this case Harry and Sally get their salaries monthly, this is the default position. You can see what other options are available by clicking the frequency dropdown. Have a play around, you can see the totals change on the left hand side as you adjust the numbers and the frequency.

Make sure you choose the ‘Owner’ of the income from the dropdown too, you’ll find your names have been pre-populated here, taken from the profile screen you just filled out.

Click on Picture to see more detail

On this screen you enter details of any of the benefits you receive on a regular basis. In the future we want to make this easier by adding a dropdown for you to choose from, but in the meantime, enter the details carefully and choose the frequency you receive it, and who is the main recipient. You’ll see the income figures change on the left.

Click on the picture for a more detailed view

Just as it say’s, this is the screen where you enter any pensions income you may have. Some people receive pensions income from a variety of sources, please make sure you enter all relevant information, and choose the right frequency from the dropdown.

Click on picture for more detailed view

This section is designed to allow you to capture any other income you may be bringing into the household on a regular basis. This may be through anything from Rental income from another property you own, or a lodger you have, right through to an eBay shop that does quite well.

Just use the frequency and owner dropdowns same as before and of course you can click the ‘Add Other Income’ if you have more than one.

Click on the picture for a more detailed view

Here you’ll see a slightly different layout. The reason being is that your housing expenses include costs that are considered a priority. What that means is, you are entitled to spend sufficient money each month to live, before your ability to pay back your debts is calculated. If you build up any debts to people (landlords) or companies that fall into any of the categories shown in this section, those debts need to be entered in this and the following screens and are treated as priority over and above any others you may have.

Housing expenses obviously relate to anything associated with the house. If there are additional expenses that are not covered by the headings, you can add your own. An example of this might be ‘Ground Rent’ for example, if you pay it that is.

Enter your information as before. The ‘Amount’ box is asking for the amount you pay regularly.  If the expenses are jointly owned by you and your partner, make sure you specify ‘Joint’ on the owner dropdown. If you are behind on payments with any of the expenses listed with an ‘Arrears’ button underneath, then click it and fill in the details. It will ask for the creditor name, enter the company you owe the money to. The ‘Total/£’ is asking for the total amount outstanding.

Click on the picture for a more detailed view

Anything entered in this section relates to costs associated with keeping you fed and clothed. It is worth mentioning that quite often creditors use what are called ‘Trigger figures’ to determine whether what you have stated you spend on particular areas of household expenditure is reasonable.

If you submit your expenses and your expenditure in particular areas falls under the trigger figures, your offer is generally accepted. If you are seen to be spending too much on certain things, your offer will be rejected and you’ll be asked to reduce expenditure in that area.

I’ll do a separate blog post on Trigger figures as it’s an interesting topic.

Suffice to say, if you are preparing your budget with a view to presenting a repayment proposal to your creditors, it’s best to be realistic but conservative when it comes to the figures you put in.

Click on picture for more detailed view

This section is straightforward. Simply enter the amounts you pay each month and the frequency of the payment making sure you put in the owner of the account. It’s unlikely but if there are fuel or utilities payments not covered by the headings shown, add a row.

Don’t forget to enter arrears amounts if you have any. If you end up negotiating reduced payments with your creditors, you may have to provide proof of expenses, so try and keep things as accurate as possible.

It’s an easy thing to say, but it is true. Worrying about something doesn’t add anything positive to a situation. The process of worry is simply reviewing what you perceive to be the possible outcomes of a particular set of circumstances, all of which tend to be out of your control, hence the worry.

As entrepreneurs we’ve lived for many years not knowing where the money we need will be coming from beyond the next month. Not worrying has become a whole lot easier during that time. For two reasons; firstly, things always seem to work out in an uncanny way, secondly we’ve learnt to focus on the things we can take control of, rather than those things we can’t.

When things get stressful Miriam and I remind ourselves not to look at the waves. Keeping an eye on your destination and being mindful of the things that are in your control, make life (your mental wellbeing) a lot more easy to deal with.

So it’s easy to say, harder to do, but if you’re worrying about something, try to stop, think about things you can do yourself to take control of your situation, and plan a way forward with what you have rather than worrying about what you don’t.

Here is a quick update.

If you are worrying about your debts, you’ll be somewhere in here.

Wherever you are (if at all) in the above, it’s best to take action quickly. If you haven’t already download and fill out iMoneyManager, you’ll know where you are, understand your problem better, and have a way of moving forward.

There is almost nothing worse than receiving a threatening letter or phone call from a creditor. It’s bad enough getting the odd one, but when it becomes a constant barrage from multiple creditors day and evening, it can really chip away at your self esteem, it affects your relationships and even your sanity.

Disarm the monster

You have to imagine a person sitting in a call centre with hundreds of numbers to call. Their phone is on auto dialler, capable of ringing hundreds of numbers in one day. Your phone number is one of thousands in the computer. This person is not very well paid and is targeted on the amount of money they are able to extract from you. Some (fortunately not many) of these people are prepared to lie, intimidate and harrass you in order to reach their targets. Not a very nice job! That’s the way things are in many of these companies.

It’s a similar scenario with the letters: Your name and address is fed into a computer which churns out thousands of letters per day. The computer is programmed to send “letter1, letter2, letter3 etc. You can’t necessarily prevent or stop this from happening to you, but you can take control of the situation.

Start Communicating and Get Organised!

If you can’t make your minimum payments the first thing you need to do is to fill out your iMoneyManager. Make sure you use the “tools” and input the name and address of all your creditors and their agents. The industry accepted approach is that you split your disposable income fairly amongst your creditors. YOur iMoneyManager does this for you automatically.

Put in realistic expenditure figures. Don’t forget to include any rises in your bills and make sure that you can back it up with proof if need be. Post the letters and financial statements to your creditors and keep a copy for yourself.

I would strongly advise you pop them in a ringbinder with dividers for each creditor. That way you can slot in their replies as well as any other documentation relating to the debt. Remember, you may have to negotiate and communicate more than once so it’s important that you keep your records in order to help to reduce the stress. Add a blank page to your ringbinder so you can keep a record of any telephone conversations you may have.

Know your Rights

Under Section 40 of the 1970 Administration of Justice Act, it is an offence to harrass and intimidate a debtor. If you continue to receive harassing phone calls even after you have attempted to come to an arrangement with your creditor, tell them:

“I would like you to know that I am aware of my rights and that under section 40 of the Administration of Justice Act, you are committing an offence by unduly harrasing me. Please do not phone me again, I would like all future communication to be done in writing.”

If you still receive calls to your landline your can “choose to refuse” them. If you have a BT landline you can sign up to this service, CLICK HERE to go to the BT page:

If you don’t use BT, contact your telecoms provider and ask if they provide a similar service.

If you are receiving calls to your mobile, consider rejecting witheld numbers and numbers you don’t recognise. Ensure you don’t leave your name or other contact details on your mobile voicemail.

Remember: If you follow this advice, you are going about things in the right way! What you need to keep in mind is that if ever a creditor refused to work with you and took you to court for non-payment, providing you had offered and paid them an affordable monthly amount and you are able to provide proof of communication with your iMoneyManager, ringbinder and payment receipts, the judge would very likely be sympathetic to your case and give you a favorable judgement. (We are aware of cases where the judge has hauled the creditors representative over the coals for making unreasonable demands on the debtor!)

Miriam

Now what I’m about to tell you is not to give you an advantage, not to give you a way of beating the system, or being unfair, it’s just a way to level the playing field which for too long has been weighted on the side of the creditor.

iMoneyManager produces repayment plans that are fair, fair to you and fair to each one of your creditors according to the industry accepted approach.

But, and here it is; If you owe money to a company, as long as you abide by the rules and attempt to seek a fair outcome, it’s you that holds the cards.

Collections departments are set up to get as much money from you as they can. It doesn’t matter at the outset how much you owe other companies, or how much stress you are under. Their job is to collect as much money as possible. Their current approach to collections relies on the fact that you aren’t aware of the industry approach of differentiating priority debts from non-priority and calculating pro-rata payments from your disposable income.

If the last bit of what I just said sounded like gobbledy-gook, then you can see why things are so difficult for the average consumer suddenly finding themselves in the middle of a debt problem with no way out. But don’t worry, your iMoneyManager automates this for you, so you just fast-track to the point of being able to negotiate from a position of knowledge.

Have a read of the article I wrote for Credit Today, the industry magazine for the collections industry. They published it too, I was quite amazed, and it caused some ripples I can tell you.

Article in Credit Today

It’s true, it is.

One thing we’ve seen more than anything else during the time we’ve been helping people through debt problems, it how vulnerable people are when they don’t have the right information.

It leaves people open to fear and being taken advantage of. It robs them of their peace, their sleep, and sometimes their relationships. It ruins their work time and their family time. It removes any chance of having goals to get themselves out of debt etc etc etc.

The reverse of this is incredible to see. Seeing someone go from the above to a point where they understand their problem, know what to do about it, and have a goal for when it’s going to come about is amazing. It’s this change, transformation that drove us to build iMoneyManager.

When you know how things work in the debt world, you are empowered to negotiate with confidence. When you know the worst thing that can happen and accept it as a possibility, no matter how remote or likely that possibility is, it loses its power over you.

The decisions you make are based on logic, reason and knowledge, and as a result are far more likely to get you out of your problem with the best possible outcome.

Next post will be about negotiation….

Click on the picture for more detailed view

Here you enter any expenses relating to communications in and out of the home. TV licence falls under that bracket, it is a communication into the home, also internet etc. Sometimes it’s easy not to realise quite how much money you spend on this area of expenses, so think carefully to make sure you don’t forget anything not mentioned in the headers.

You’ll notice that the only heading to have an ‘Arrears’ button underneath is the TV Licence one. The reason is that your TV Licence is considered a debt that takes priority over others, because the consequences of not paying are more serious (you could end up in prison) than with other debts.

If you owe money to any of the companies providing you with services in the other areas (where there is no ‘Arrears’ button), you need to enter the details in the debts section when you get to it.