If you are struggling with debt there are lots of organisations that can help you.
The best place to start is with a debt charity that will offer fee free advice and support.
Try to avoid a debt management company that charges for their services, this is money you could be using to pay off what you owe.
What do debt management providers do?
They offer a range of services starting with initial advice to discuss your circumstances and goals (either online, over the phone or face to face).
They will then help you organise and manage the steps you need to take, from simple budgeting to more formal solutions, such as:
Debt management plans (DMP)
A DMP is an agreement between you and the companies you owe money to, to pay one set monthly fee you can afford for non-priority debts such as credit cards and store cards, until they are all paid off.
Unlike the next three options a DMP isn’t legally binding which means either side can refuse to continue with it at any time.
Debt relief orders (DRO)
DROs are for people with debts under £20,000 who do not have assets such as a home. Payments are stopped for debts included in a DRO and usually written off when it ends.
Individual voluntary arrangements (IVA)
IVA monthly repayment plans are for for larger debts based on an amount you can reasonably afford which lasts for five to six years.
You will be able to keep your home, although you may be asked to remortgage it if possible. Once the IVA has finished any remaining debts are written off.
Bankruptcy
When someone cannot contribute to their debts, declaring bankruptcy will write them all off. However during a bankruptcy you will have to sell any valuable assets, including a home.
Considerations to make when choosing a debt management company
Long-term credit implications
Any plan that reduces how much you pay to creditors may have an impact on your credit file, which could make it harder to borrow money in the future.
Always make sure you’re comfortable with the long-term implications of each solution before committing to one.
For example, although bankruptcy only lasts around 12 months it will remain on your credit file for six years, making it difficult and expensive to get credit.
It may also impact your ability to do certain jobs such as those in the financial services sectors and you will not be able to be a company director.
Costs
Although charities offer free advice, some of the above solutions still come with costs such as application fees.
If you are entering into an IVA, a qualified insolvency practitioner will be appointed and charge a monthly fee to administer it.
10 organisations that can help you with debt
It can be hard to see a way out of debt when you are facing it alone.
That’s why contacting an organisation offering free expert advice is such an important first step, they’ll be able to help you see more clearly how to approach your problems.
Many will also help you manage the formal solutions you opt for, and deal with your creditors so you don’t have, which will hopefully reduce the stress of your situation.
The organisations below can help you take the steps you need to overcome your debt, you can contact all of them online or by phone:
StepChange Debt Charity
StepChange is a free debt advice service that helps with a variety of debt solutions, including debt management plans, individual voluntary arrangements, and bankruptcy.
Stepchange Debt Charity’s phone number: 0800 138 1111
Debt Advice Foundation
Debt Advice Foundation is a charity that offers free and confidential debt advice. They help people with a range of debt problems, including credit card debt, loan debt, and debt consolidation issues.
And they offer a variety of debt solutions, including bankruptcy, debt relief orders, individual voluntary arrangements, and debt management plans.
Debt Advice Foundation’s phone number: 0800 043 40 50
Money Advice Service
Money Advice Service is a free and impartial service providing help with money and pensions. It discusses how to manage money, save money, and plan for your retirement.
It also provides information on how to deal with debt, get help with the cost of living, and how to find financial support.
Money Advice Service’s phone number: 0800 138 7777
Financial Wellness Group
Financial Wellness Group offers free debt management plan and individual voluntary arrangement apps. They are registered in England and Wales.
Financial Wellness Group’s phone number: 0161 804 5464
National Debtline
National Debtline is a free debt advice service. They offer confidential and independent advice.
National Debtline’s phone number: 0808 808 4000.
Citizens Advice
Citizens Advice is a charity providing free, independent and confidential advice to people in the UK. They offer advice on a range of topics, including benefits, debt, housing, and consumer rights.
Citizens Advice phone number: 0800 240 4420.
Christians Against Poverty
Christians Against Poverty helps people overcome poverty and debt. They provide free debt counseling, budgeting advice, and job training to individuals and families in need.
Christians Against Poverty’s phone number: 0800 328 0006
Turn2Us
Turn2Us is a UK charity that helps people who are struggling financially. They offer support, help find grants, and information about benefits.
Turn2Us phone number: 0808 802 2000
Working with us
One option that could prevent your debt issues spiralling out of control is to sell your home.
If you have a good amount of equity, the difference between the value of your home and your mortgage, it may give you the funds you need to pay off your debt. Any costly mortgage payments you have will also stop.
If you decide this is the right option for you, we can help. We specialise in buying property quickly, in just seven days if necessary.
And because we only buy from our own cash funds, there are no estate agents’ fees to pay and you are never part of an unpredictable chain that could fall through. We also instruct and pay for solicitors.
We aim to make the process as hassle free as possible for you and are used to dealing with challenging home-selling situations.
