An online search for debt management advice reveals thousands of companies all competing for business, some which simply want to make a profit by claiming to clear debts and a few which offer an independent non-profit debt helpline.
Debt Management Advice
For those starting the process of looking for reliable debt management advice consider the words of financial journalist Martin Lewis. He says, “The aim is to find non-profit debt counseling help, in other words a one-to-one session with someone paid to help you, not to make money out of you. Be careful not to confuse this with free help; many commercial companies say they’re free as you’re not charged directly.” It’s good advice because paying a commercial company offering debt management advice will mean a smaller proportion of any debt repayment will go to clearing the debts.
Clear Debt
Debt management advice has the almost immediate effect of reducing stress because a good debt advisor will accurately outline the best method for getting back on track. Perhaps the most important piece of advice the debtor will get is, however bad the debt problem seems to be, there is always a solution although it might take three to five years to be finally clear of debt.
New legislation now means that debtors who have sought advice from a non-profit debt advisor can have the constant phone calls and letters from debt collection agencies stopped for thirty days. Within this period the debt advisor will work out an appropriate debt reduction plan and negotiate its implementation with the creditors.
What is an appropriate debt reduction plan? The answer to this question is of course it varies; however there is a lot of help with debt available and a debt advisor will almost certainly discuss the following strategies with their clients:
- Negotiate a freeze on interest with creditors
- Debt Management Plan
- Debt Relief Order
- Individual Voluntary Arrangement
- Protected Trust Deed (Scotland)
- Bankruptcy
Debt Management Programme
Of course it’s entirely possibly for individual debtors to negotiate a debt management programme directly with their creditors. For debts on the lower end of the scale this may well succeed. However creditors will almost certainly prefer any debt reduction proposal to come from a recognised debt-counseling agency.
Independent advice can be had from the following debt counseling agencies:
- Consumer Credit Counseling Service (CCCS)
- Credit Action
- UK Insolvency Debt Helpline
- Citizens Advice Bureau
Sources:
Moneysavingexpert.com, Debt counseling, website accessed 13/4/10
BBC News, Government Debt Advice Strategy Branded a Failure, website accessed 13/4/10
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