So you're in debt! Who isn't?
Hi everyone if you find yourself here, there is a good chance you have a pile of letters that you don't open because you know what they are and you have stopped answering the phone to certain numbers because you know who that is.
Try not to worry...
Well here at Drake Michigan we know how that feels because we have been there, we have made all the mistakes and done all the wrong things including ignoring and trying to run from the issues. But we can now tell you that the best way to deal with financial debts and difficulties is simple, not easy but it is simple and the best form of defence is to attack it head on.
The hardest part is to be truthful with yourself, there is no point wrapping anything up and making excuses, it's time to lay it all out bare on the table and be humble with the difficult situation you find yourself in. Now for the good part, we are here to hold your hand and guide you through the best we can.
Let's begin: Get yourself a notepad and pen and a nice cup of tea or coffee and let's make a list of everyone who you owe money to and now lets send them all the following letter:
Download Template
This letter will usually give you a few weeks breathing space and time to prepare for round two.
Now if you feel certain companies and debt collection agencies have been adding unfair and unnecessary charges onto your original debt then take onboard the following:
If you want to stop the creditor or debt collector from adding interest and charges to your debt, you can take the following steps:
1. Review the original contract or agreement: Carefully examine the terms and conditions of the original contract or agreement that established the debt. Look for any provisions regarding interest rates, charges, or penalties.
2. Validate the debt: As mentioned in the previous letter, request the debt collector to provide verification and validation of the debt. Ensure that they provide a breakdown of the outstanding balance, including any interest and charges that have been applied.
3. Dispute inaccuracies: If you believe that the interest or charges being added to your debt are incorrect or unjustified, you can dispute them. Provide a detailed explanation of why you believe the charges are erroneous or excessive.
4. Seek legal advice: If the debt collector continues to add interest and charges despite your objections, consider consulting with a consumer rights attorney or a debt advisor. They can provide you with guidance on your specific situation and help you take appropriate legal action, if necessary.
5. Complaint to regulatory bodies: If you believe the debt collector is engaging in unfair or deceptive practices, you can file a complaint with relevant regulatory bodies. In the United Kingdom, you can contact the Financial Ombudsman Service or the Financial Conduct Authority (FCA) to report the issue and seek resolution.
Remember, it is important to keep thorough records of all communication, documentation, and any evidence related to the debt and your efforts to dispute the interest and charges. This will help support your case and protect your rights in any future legal or regulatory proceedings.
Once the company or debt agency replies with all the required information you have asked for then it's time to prepare the next letter or email.
But before you reply make sure you take the maximum amount of time you are allowed to reply so if they expect a response within 14 days or 30 days then reply on the 13th day or the 29th. This alone has given you many weeks of solitude and grace where if you're serious about sorting your life out you would have been following many other of the advice on the Drake Michigan platform. Especially things like gratitude, meditation, visualisation and also taking action in ways to improve your finances or make cutbacks where possible.
Now the following letter is a letter of offer. Now you might have been saying “I'm not paying them anything” but ask yourself the following: Did you have the product or money and do you owe the original company or person the original outstanding debt that is being chased and then ask yourself how has been avoiding and ignoring the debt been going for you so far. If your answer was YES and SHIT then it's time to get this next letter done.
And here is the reason why. By responding and making an effort no matter how minimal you take back control of the situation, not just in your own life but in terms of the legal side. And this subconsciously even if you don't realise it is massive. There is not a court in the land that will order you to pay your debtors more than you can physically afford to pay them and in fact they will take your efforts and merits to address the situation head on as a big tick in the box on your side.
Here is the offer template.
Now the following template is for your personal records but make sure to add a copy of this to all of your payment offer letters.
In the Income and expenditure sheet, you need to be honest with yourself, there is little point thinking you have £100 spare each month to pay your debtors if the truth is you only have £10. And you are allowed to have money for yourself as well, people's wellbeing and mental health of being in times of hardship is all taken into account. I speak from personal experience when I have been sat in a courtroom on many occasions and gone through all of this and the office clerk said to me “why are you offering £20 you don't have £20 to offer” all I could afford to offer was £1 and that is what was offered and that is what the court ruled and the debtor had to decline or except.
I am going to share a little nugget of wisdom that people don't tend to realise or do when trying to dig their way out of the hole they find themselves in. And it is this: When all the money is being added up what is coming in and what is going out you must and I can not emphasise this enough, you must have a pleasure pot or a treat pot. And this small pot of money is for you and your partner or family to have a day out, a takeaway, a night at the pictures, anything but something so you know all your efforts are being rewarded. One of the biggest reasons people fall behind with payment plans and debts is because they feel they have no life, they feel they are not getting anywhere and what's the point. But by having this little treat once a week or saving it for a bigger treat once a month it makes all the sacrifices and commitments worthwhile.
Here is another little tip, if you're in a position. If you have a list of old debts or CCJ’s on your credit file you can reach out to them and make them an offer to clear the debt. Now you will be surprised how little they will actually except to call it a day and wipe their hands with it. Remember these debts have usually been passed on and sold that many times behind the scenes it is a bit of a joke.
If I had an outstanding debt of £1000 I would offer £250 to £300 and no more. They will almost always accept it as it might be the best offer they will ever get. It will then be wiped from your record after a few weeks, it will say something like part payment settlement but it's a win-win all round.
Financial Breakdown
The financial breakdown for a typical household can vary depending on individual circumstances, preferences, and location. However, here is a general guideline for allocating income to different categories:
1. Housing: It is generally recommended to spend no more than 30% of your monthly income on housing expenses, including rent or mortgage payments, property taxes, home insurance, and utilities.
2. Transportation: Allocate around 15-20% of your income for transportation costs, including car payments, fuel, insurance, maintenance, and public transportation expenses.
3. Groceries and Household Supplies: Aim to spend approximately 10-15% of your income on groceries, toiletries, cleaning supplies, and other household items.
4. Debt Payments: Limit debt payments, including credit cards, loans, and other debts, to no more than 10-15% of your income.
5. Savings and Investments: It is advisable to save at least 10-20% of your income for future goals, emergencies, and investments.
6. Personal Expenses: Allocate around 10-15% of your income for personal expenses such as clothing, entertainment, dining out, subscriptions, and other discretionary spending.
7. Health and Medical Expenses: Set aside a portion of your income for health insurance premiums, co-pays, medications, and other healthcare costs.
8. Education Expenses: If applicable, allocate a percentage of your income to cover education-related expenses, such as tuition fees, books, and supplies.
9. Miscellaneous Expenses: Allocate a small portion of your income for charitable contributions and other miscellaneous expenses that may arise.
It's important to note that these percentages are general recommendations and can be adjusted based on your specific circumstances and financial goals. It's also crucial to regularly review and adjust your budget as your financial situation changes.
Remember, financial priorities and circumstances can differ, so it's essential to tailor your financial breakdown to meet your individual needs and goals.
The following is a short list of ideas to get you going if you find yourself stuck and not sure how to move forward:
If someone is struggling and looking for easy income jobs, here is a list of potential options, different names for different areas may apply but you get the idea.
1. Freelance Work: Offer your skills and expertise on freelance platforms such as Upwork, Fiverr, or Freelancer. You can provide services like writing, graphic design, social media management, virtual assistance, or data entry.
2. Online Surveys: Participate in online surveys or market research studies that pay for your opinions and feedback. Websites like Swagbucks, Survey Junkie, or Vindale Research offer opportunities to earn money by completing surveys.
3. Delivery Services: Sign up as a driver for food delivery services like Uber Eats, DoorDash, or Postmates. You can work flexible hours and earn income by delivering meals or groceries.
4. Pet Sitting or Dog Walking: Offer your services as a pet sitter or dog walker in your local area. Many pet owners are willing to pay for someone to care for their pets while they are away or to provide regular exercise.
5. Task Apps: Join task-based apps like TaskRabbit or Gigwalk, where you can find small local tasks or errands to complete for pay. This can include household chores, moving assistance, assembling furniture, or running errands.
6. Online Tutoring: If you have expertise in a particular subject, consider becoming an online tutor. Platforms like VIPKid or Tutor.com offer opportunities to teach English or other subjects to students around the world.
7. Virtual Assistant: Offer virtual assistance services to businesses or entrepreneurs. Tasks may include managing emails, scheduling appointments, conducting research, or providing administrative support.
8. Rent out a Room: If you have a spare room in your home, consider renting it out through platforms like Airbnb or HomeAway. This can provide a steady source of income, especially if you live in a popular tourist destination.
9. Gig Economy Jobs: Explore various gig economy jobs like ride-sharing services (Uber or Lyft), grocery shopping and delivery (Instacart), or home cleaning services (Handy). These jobs often offer flexibility and quick payment.
10. Online Content Creation: If you enjoy writing, creating videos, or podcasting, you can monetize your content through platforms like YouTube, blogging, or podcast sponsorships. While this may take time to build an audience and generate income, it can be a rewarding long-term option.
Remember, the availability of these jobs may vary depending on your location and personal circumstances. It's important to research each opportunity, consider any necessary qualifications or requirements, and ensure the job aligns with your skills and interests.
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