Is paid Debt Management REALLY so bad?

WhyisFreeBetter

Hi all

Won't go to into my own situation, but loads of debt and not happy about it.

One thing is bothering with regards to advice I've come across. That is, why is free debt management better?

This is a serious question, I have no connection with anything like this, and my knowledge is somewhat limited, and of course, I am considering the obvious that free debt management plans have no fees. However, I don't think it is so simple. So I've listed a few points.

1) Free debt management organisations are incredibly busy and you have to wait a long time (by this I mean 1 some weeks, months). For me more time = more stress.

2) I would expect there to be more incentive for a paid debt management company to help you as they only get paid from you.

3) Paid debt management companies rely on reputation to some extent - word-of-mouth for example.

4) When telephoning with questions, it is clear free debt management organisations have less time available than paid ones.

To summarise, for me personally, I know I'm in debt, and have NO problem paying someone to help me out of it. Why not? Should we not pay ONLY because free companies exist? Or is there more to it?

I'm a big believer than cheaper is not always best, especially with food, everyday household items, and some services. For example, go with the cheapest removal company you can find, and calculate the cost of broken items at the end.

I think it could be highly beneficial to have a list of trusted paid debt management companies for people like me, who would rather pay someone to do there dirty work for them.

I would only ask this (although I'm well aware I can't really ask for anything!). Look past the 'no fees' aspect before considering this. I'm not saying paid is better, not at all. I'm just saying it might not be worse when taking everything into account. That's assuming the paid company is a decent one.

If anyone could recommend a good paid debt management company, I would be very interested.....

RAS

Re you aware that Payplan is a company not a debt charity?

bobdauilda

Aren't Payplan used by CCCS and NDL to set up free DMP's?

RAS

No CCCS and NDl do DMPS themselves.

Teacher2301

What I can't fathom is why you would need a DMP company or anyone for that matter. You can get some really good advice from CAB or here and then write to each creditor offering a reasonable but equal share of your income that goes to paying off debts - which is what a DMP company would do but at a cost. So do it yourself and save money.

DevonGirl

I think that some creditors won't / prefer not to deal with debtors directly, but will advise you to go through one of the free DMP arrangers. In addition, some creditors refuse to deal with the fee-paying companies as ultimately you're paying someone else money that could be going towards your debts. At least I think that's the reasoning!

Not only that, but part of the reason you can get through to the fee-paying companies is that they have more staff manning the phones paid for - yes you've guess it - those people who are in debt! If you ring the free companies at certain times, the lines are a lot less busy. Also you can e-mail them. Plus once you set up a DMP you have a different number to call for an 'after care team' and I've never had to wait more than 30 seconds to be put thought.

I dont' really get the point about them having more 'incentive' to help you because you are paying this - I've personally found the free charity organisations always very keen to help and ultimately I'd rather have a large organisation on my side with all their knowledge and expertise.

Finally, when you've experienced the nasty tricks that some creditors use, such as calling 8 times a day or more, aggressive call staff and threatening letters, it's great to be able to say 'on CCCS - call them please'!!

Not trying to convince anyone - just putting my view forward - and why would you pay a company when you can get just as good a service if not better for free?!

WhyisFreeBetter

Teacher2301 wrote: »

What I can't fathom is why you would need a DMP company or anyone for that matter. You can get some really good advice from CAB or here and then write to each creditor offering a reasonable but equal share of your income that goes to paying off debts - which is what a DMP company would do but at a cost. So do it yourself and save money.

I think that's a fair point. I need someone to do a DMP for me for two reasons. One is because I am spending too much time on my debts. So not only am I in debt, but I am losing money due to losing time working (I am self-employed). The other is that I am not organised enough to juggle all these things. I'm not proud of that, but I can not pretend otherwsie. If a debt management company can do what you are suggesting for a fee, I think I would be financially better off in the end than spending the time necessary writing letters, and dealing with / worrying about it myself.

@ RAS, yes I've spoken with Payplan, do know they are a company. However, there is a difference between speaking to them and a couple of the paid debt management companies I have spoken to, which is the amount of time they have for you. It seems a paid company will be on the case quicker (for obvious reasons).

Still interested to know if anyone has successfully used, or can recommend a good paid debt management company.

RAS

I am not aware of any OP who has recommended a fee-paying DMP provider on here.

davetrousers

Why do I suspect that this is a :spam: post from a new member?

10past6

WhyisFreeBetter wrote: »

still interested to know if anyone has successfully used, or can recommend a good paid debt management company.

99.9% of the members on this site who use CCCS / Payplan, don't have an issue once their DMP settles down.

Oh btw, take a look at my signature.

WhyisFreeBetter

davetrousers wrote: »

Why do I suspect that this is a :spam: post from a new member?

How about you give others a chance? Nice welcome, thanks.

For everyone else, no not spam at all, a genuine question. I'm fighting debt like others here, very stressed about it, close to getting serious court action if I don't act quickly. But when visiting this site and forum, I get the impression everything that is free or cheaper is seen to somehow better. My experience (of everything) so far has not led me to that conclusion. It is just my opinion.

For example, I have wasted hours in the past looking for cheaper this and that, whether it be insurance, savings accounts, etc. I honestly don't know if that saved me money in the end based on the time lost. Sometimes I think my friends that just leave such things to a broker are not so silly. They pay more but save time. I guess the time issue is a side-effect of being self-employed. And to mr spam accuser, my job has absolutely nothing to do with finance in any way. I've just been stupid with money and let the banks take me for a ride. Now I need to deal with it quickly, while still being able to earn a living.