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Financial problems can be one of the most stressful things that any of us are likely to be faced with in the course of their lives. As well as the very real practical problems that being in debt can lead to, one of the most challenging aspects of the problem can actually be the fact that you do not know what to do about it or where to go for help. This website has been created to provide people in the UK with free help and information, offering an online source of advice about debt and how to deal with it.
Many people are understandably anxious about who to approach for debt help, because they have heard that not all companies that offer such services can be trusted. This is quite true and it is sensible to exercise some caution about responding to adverts and website offering miraculous solutions to your problems.
Most website you will come across will be representing a particular company and are designed to get you to use the service they provide. Although we are licensed through the Office of Fair Trading, we do not offer any debt management plans or other debt solutions directly. This means we are free to check out the options out there and recommend some of the most reliable and reputable companies, leaving you to make the final decision about who you choose to help you.
On this site we will provide you with the information you need so that you understand what can and cannot be done about your situation. The information and advice will also help you decide which option might be best for you. Where you need help with setting up a debt management plan, individual voluntary arrangement, or loan, we will provide details of a few organisations that we know you will be able to approach for honest advice about your debt problems. It is always best to shop around in order to make sure you are getting the best deal for yourself.
It is important to have an understanding of the mechanics of how debt can be dealt with in different circumstances. The right choice for you will depend on various factors including how much debt you have, your income, how many creditors, etc. The following section outlines the choices you have and should help you find out which option to explore further.
Negotiate With Creditors Directly
The advice that no commercial debt company will give you is that you can work out a plan for repaying your debts without any outside help. There is a well established process that you can go through for negotiating with your creditors to agree new terms for the repayment of your debts. This can include writing off part of your debt, agreeing lower payments over a longer period or waiving extra fees and charges. The process involves working out your own financial position very clearly with a personal financial statement and using this as a starting point to explain to creditors that you simply do not have the funds to keep up with payments. You then make offers to them based on sharing out the income you do have as fairly as possible.
Borrowing Money To Pay Off Debts
Debt consolidation loans are one of the most common ways people choose to deal with debt, but this is often because they are widely advertised and available, rather than because they are the most suitable solution. It is not usually good to take on more debt when you are struggling financially and many people end up worse off by taking out this type of loan.
The principle is that you take out one big loan to pay off all your other debts, leaving you one lower payment to make. Sounds great, but the reason the payments are lower is that you are paying the loan off for much longer than your debts would have lasted. By the end of the loan, many people have paid back far more than they would have if they had just stuck with the original debts.
There are circumstances when a loan is the best option, but just be careful to check how much you will have paid back by the end of the loan, compared to if you just paid off your existing debts.
Debt Management Companies
If you decide you need professional help and advice on debt, it is almost certainly a debt management company that you will approach. The main solution that these organisations offer are debt management plans. The big advantage of these over loans is that they do not involve taking on further borrowing, but focus immediately on reducing your debt.
When you sign up for a plan of this sort, an expert negotiator from the company will approach all of your creditors with view to getting their agreement to join in the plan. What this will entail is reaching new agreements for the repayment of what you owe, making it more affordable for you. This may involve changes to interest rates or reductions in certain charges. The end result for you is a single lower monthly payment that you make to the debt company. As well as being more affordable, this is much easier to manage.
For people with more serious debts a debt management plan might not work. For this sort of plan to be practical, you need to have enough income in relation to your debts to afford reasonable payments. If your debts are so high in proportion to your income that you could never realistically pay them back, you may need to consider an individual voluntary arrangement, or IVA.
An IVA is a legal agreement whereby you make payments towards your debts for up to five years and at the end of this time any debts you have left get written off. The payments you make are based on what you can actually afford, so many people end up writing off a large part of what they owe.
The only alternative for very serious debts is bankruptcy. This may be the only appropriate route for some people, but has serious consequences, so should not be entered into without taking professional advice about the alternatives first.
Unless you are confident about the process of dealing with creditors directly, the best starting point for most people is to approach a reputable debt management company for advice. The first thing they will do is run through your finances with you and give you advice about what to do next. If a debt management plan or IVA is appropriate, they will make a proposal which you are free to accept or not, otherwise they will advise you about your alternatives.
Applying to debt companies for advice is very easy as they all have simple online forms to start the process. Once you have filled this in, they get back to you to discuss things further. Take care to check out any company you are thinking of applying to first, to ensure they are properly regulated and have a good reputation for providing help to other people.
A good starting point is to complete the form at the bottom of this page, which will go to 123 Debt Solutions, our top recommendation for providing debt advice in the UK.
Complete This Simple Online Form For A Free Review By An Advisor From Our Recommended Debt Company, 123 Debt Solutions
Just submit the form and an advisor will get straight back to you
You Can Use This Form To Apply For Trust Deeds, IVAs, Debt Management Plans or Debt Consolidation Loans
Your home may be repossessed if you do not keep up repayments on a mortgage, loan or any other debt secured on it.
Think carefully before securing other debts against your home.
Repaying debt over a longer period may increase the total amount to be repaid.