Is debt management a bad idea?
Hi there, i am in big debt and i have approached a debt management company who were really helpful. Anyone been there and can give me advice before i go ahead? i have doubts
Answers:
There are a lot of good debt management companies out there who will give you good advice and put your finances back on track - they do charge a fee and why shouldn't they, try walking into a solicitors office for free advice, you would be shown the door, people have to pay for services and knowledge and if it sorts out your finances and helps you not to get in the same position again, I would say its money well spent.
Go to the citizens advice bureau first, they'll offer you FREE debt advice and show you the best way forward. Debt management companies are businesses at the end of the day and ultimately want to make money. You shouldn't have to pay for debt advice or help!
in the UK i approached 5 of them, the payments they want you to make are still too high and have to be maintained for 60 months with a NO FAIL payment plan, fail once and you become bankrupt. Personally i went the bankrupt route right from the off, and mine is nearly up.i get discharged on the 16th of this month.woooohooo, if you want more details just mail me.
It all depends on your own circumstances. What I would say is NEVER trust anyone that wants to lend you more money. It may sound like a good solution but it very rarely works.
I have just come out of that problem after 12 months of unemployment.
When things had got as bad as they possibly could I swallowed my pride and went to my local C.A.B. they were great, they stopped all the nasty letters and made sure that everyone chasing me didnt take unfair advantage.
I wish that I had gone to them first.
My advice, dont borrow until you have talked to C.A.B, they will bring everyone under control, then you have a better chance to sort things out.
Good luck.
Debt is a bad idea. Debt management is a great idea but there are many firms out there. My advice is to ask around and then access your options. It never hurts to get a second opinion.
My understanding of these companies is that the industry has a poor reputation. What you can do for yourself is:
Write to the credit card companies to not charge you interest while you reduce the debt.
Do not use credit cards.
Spend as little as possible (no movies, no dining out, no luxuries) (be cheap and stingy)until you've paid off the debt.
Pay off the credit card with the highest interest rate first.
Once you have no more debt, use a credit card to make it easier than carrying cash. Pay off the card within 5 days of receiving the bill. Only use one credit card.
It's safe to say that any company that approaches you is a for-profit company that isn't really looking out for your best interests. Consumer Credit Counseling Services is a reputable debt management company that has been around for a long time and a lot of creditors will work with them.
Lots of info here.
I suggest you listen to Dave Ramsey. He is an author / radio talkshow host with the most common sense way to "manage" debt.. Get rid of it altogether.
There is no magic bullet.. You need to change your life. Spend less than you earn. Don't borrow money . pay cash for EVERYTHING. . Etc.
I liked the previous answer, don't listen to anyone who wants to lend you money to "pay off" debts.
Payplan (0800 917 7823) are free as they are financed by donations, hence will not charge 15 % fees , that some other debt management companies charge.
This will mean that all your contributions go to the creditors,
At the end of day, tell payplan about the debt rather than hiding letters from creditors, they do take 6-8 weeks to resolve the situation
I used to work for a collection agency, and although they help you consolidate your payments, they don't stop creditor calls. Your account will still be in collections and the debt management company won't tell you that.
They don't communicate with collection agencies, so be careful and keep yourself informed.
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Answers:
There are a lot of good debt management companies out there who will give you good advice and put your finances back on track - they do charge a fee and why shouldn't they, try walking into a solicitors office for free advice, you would be shown the door, people have to pay for services and knowledge and if it sorts out your finances and helps you not to get in the same position again, I would say its money well spent.
Go to the citizens advice bureau first, they'll offer you FREE debt advice and show you the best way forward. Debt management companies are businesses at the end of the day and ultimately want to make money. You shouldn't have to pay for debt advice or help!
in the UK i approached 5 of them, the payments they want you to make are still too high and have to be maintained for 60 months with a NO FAIL payment plan, fail once and you become bankrupt. Personally i went the bankrupt route right from the off, and mine is nearly up.i get discharged on the 16th of this month.woooohooo, if you want more details just mail me.
It all depends on your own circumstances. What I would say is NEVER trust anyone that wants to lend you more money. It may sound like a good solution but it very rarely works.
I have just come out of that problem after 12 months of unemployment.
When things had got as bad as they possibly could I swallowed my pride and went to my local C.A.B. they were great, they stopped all the nasty letters and made sure that everyone chasing me didnt take unfair advantage.
I wish that I had gone to them first.
My advice, dont borrow until you have talked to C.A.B, they will bring everyone under control, then you have a better chance to sort things out.
Good luck.
Debt is a bad idea. Debt management is a great idea but there are many firms out there. My advice is to ask around and then access your options. It never hurts to get a second opinion.
My understanding of these companies is that the industry has a poor reputation. What you can do for yourself is:
Write to the credit card companies to not charge you interest while you reduce the debt.
Do not use credit cards.
Spend as little as possible (no movies, no dining out, no luxuries) (be cheap and stingy)until you've paid off the debt.
Pay off the credit card with the highest interest rate first.
Once you have no more debt, use a credit card to make it easier than carrying cash. Pay off the card within 5 days of receiving the bill. Only use one credit card.
It's safe to say that any company that approaches you is a for-profit company that isn't really looking out for your best interests. Consumer Credit Counseling Services is a reputable debt management company that has been around for a long time and a lot of creditors will work with them.
Lots of info here.
I suggest you listen to Dave Ramsey. He is an author / radio talkshow host with the most common sense way to "manage" debt.. Get rid of it altogether.
There is no magic bullet.. You need to change your life. Spend less than you earn. Don't borrow money . pay cash for EVERYTHING. . Etc.
I liked the previous answer, don't listen to anyone who wants to lend you money to "pay off" debts.
Payplan (0800 917 7823) are free as they are financed by donations, hence will not charge 15 % fees , that some other debt management companies charge.
This will mean that all your contributions go to the creditors,
At the end of day, tell payplan about the debt rather than hiding letters from creditors, they do take 6-8 weeks to resolve the situation
I used to work for a collection agency, and although they help you consolidate your payments, they don't stop creditor calls. Your account will still be in collections and the debt management company won't tell you that.
They don't communicate with collection agencies, so be careful and keep yourself informed.
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