If you are having problems with debt
and need to take some advice to sort them out then you may not yet know where to turn. Search online for debt management help and you’ll be shown thousands of results of companies and individuals who can potentially help. If you’ve not had to look for advice here before or don’t know anyone else who has then this can be like trying to find a needle in a haystack. You won’t know who will give you the right kind of advice and whether they will charge you for it.
What you don’t want to do at this stage, obviously enough, is to choose a debt advisor who isn’t going to actually help you out. You certainly don’t want to be throwing good money after bad to pay for advice that may not actually be relevant to you or that may not work for you. What you need is to talk to someone who understands debt, who can understand your circumstances and who then can talk you through all the options to find the best solution.
There can be some charges involved in getting debt management advice and help
but these are not costs that you need to be paying from the word go. Getting debt advice and help, for example, is something that you can do 100% confidentially and 100% free. So for example, you could make a start by finding out what your debt management options could be by talking to charitable organisations such as:
Any advice you get with these agencies, whether you visit an office, make a phone call or use online services is free. You can learn all about the different types of debt management solutions and you can get help to choose the best solution for your own needs, completely confidentially and without any obligation.
But, what about once you’ve decided what to do? In most cases actually taking out some form of debt management program will incur some costs. Whilst the agencies listed above do offer some free debt management services this may not cover all of your needs. You can, for example, ask The Consumer Credit Counselling Service and Payplan for free help with the setting up and administration of a debt management plan and Payplan also offer free services for IVAs but this isn’t the norm across the industry.
- If you use a commercial debt management service, for example, then the company will charge you for the help that they give. This will usually involve an initial administration charge or a set up fee followed by a percentage of the money that you give them to administer to your creditors every month. Many people prefer to take a commercial route here – this is down to personal preference and you should weigh up the pros and cons of using a free service and paying for it before you make a choice between the two.
Other debt management solutions also come with costs that you generally cannot avoid. If, for example, you decide to declare yourself bankrupt then you will have a series of official/legal fees to pay before you can do so. This will involve paying court fees (up to £150 depending on your situation), a deposit to the Official Receiver (currently £345) and a small fee (around £10) to swear your statement of affairs.
often come with costs too. You need to pay your Insolvency Practitioner to help you set up and administer your IVA agreement. Costs here will vary according to the type of Insolvency Practitioner that you use. In some cases this will involve up front costs but in most cases your costs here will be taken from the repayments that you give to your Insolvency Practitioner to be divided amongst your creditors.
So, remember, debt management advice doesn’t have to cost you any money at all. There are, in fact, many advantages to using a free and impartial service in this situation as you will get a better understanding of what your options are. But, you may need to pay for any specific debt management help that are given thereafter and should therefore make every effort to make sure you choose the right kind of help.