Help for a friend..

floralaura

Hi, i have just been speaking a to a friend who is in debt, she has a debt of £25k (ish), she told me she had spoke to a debt management company who were going to help her..she then told me it was great, so i asked who they were etc. I went to their website and discovered the following..
1st two months payments are their 'fee', then 15% a month will be taken from what she pays them for 'administration'..they told her she can pay £80 a month and be debt free in 5 years..so i pointed out that

£160 1st two months/their fee

10 months at £80= 800

- the 15% of 800= 120

£280 a year 'fees' to the company

meaning that only £680 will come off her debts this year..meaning there is no way on this planet that with this company she will be debt free in 5yrs!!

She has given them her debt details and her bank details and has been told they will send her stuff to sign..so i have told her not to sign anything as it doesnt seem right to me especially the

Are you a member of any trade bodies?
We are in the process of applying to become a member of the trade association DEMSA (Debt Managers Standards Association) and we comply with the Office of Fair Trading guidelines regarding Debt Management.

bit of the website!
Im no expert on these things though so have decided to ask here if this is a normal plan/if there any free ways for her to do things?
Thank you in advance for any help..

RAS

She can get the same service for free from these debt charities http://forums.moneysavingexpert.com/showthread.html?t=2077631

paypaln also offer free DMPS.

Please get her to use them, not the people who want to cream off their profit from her debts.

Also, first thing tomorrow, she needs to ring the bank and find out whether the inforation she has given is enough for the dent managment company to take money from her account. We have had several instance when fee-chargers have taken fees before documents were signed, even after the person decided not to use them because they had been on here.

floralaura

Thank you for the info, i will have a look at the link you added now and let her know..i have just sent her to Payplans site and she was still looking at IVA but she doesnt want to have to contact the creditors herself..so i was suggesting the DMP instead, just want to be sure im giving her the right advice, which is best for her to do, a IVA or a DMPS?.thanks again!

Nargleblast

If she speaks to one of the debt charities in the link posted by RAS they will assess her situation and tell her what her options are and what, in their opinion, would be the option best suited to her situation. Tell her not to be rushed or pressured into agreeing to anything without getting the full info on it first - this is her debt and her life, so she needs to be happy with her decision.