Debt Consolidation Companies

reinterpretations1

Hello

I'm a new debt free wannabbe, and new to the site.

Finally stepping up to the challenge of getting rid of the weight of debt holding me down.

I've investigated consolidating my debt into a loan but hae been refused. Off of the back of that various companies have tried to sell me a debt consolidation agreement where i pay them a percentage to manage and pay off my debts.

I was wondering whether anyone could provide some advice on whether this is a good idea?

Thanks

Mark

Tixy

What they are offering you is a debt management plan. They can be a good idea for people who cannot meet their minimum payments but only if you use one of the charity organisations that do not charge a fee at all.

But you need to be aware what you are agreeing to and the implications it will have. You will be paying each creditor less than the minimum payment you originally agreed therefore they will almost certainly default you and these defaults will stay on your credit file for 6years.
In addition a part of a DMP you agree not to take on any more credit until all your debts are paid.

DMPs can be lifesavers for people but they are for those who cannot afford their current debts as they stand. If you can meet your minimums without getting further into debt each month then you are likely to be better to carry on as you are and preserve your credit rating.

These are the charities to contact - https://forums.moneysavingexpert.com/discussion/2077631

reinterpretations1

I thought as much.

I asked whether it would effect my credit rating as i would like to re-mortgage as some point and they said it wouldn't!

Thanks for the reply.

Tixy

They are lying - frequently do. They will tell you it won't affect your credit score and often tell you that they can guarantee the creditor will freeze interest, which they can't.

Least you found out before you went any further. But if you are struggling then speaking to one of the debt charities can be a good idea - or have a read of some info about debt advice on national debtline. By talking to the charities you don't commit to anything and they certainly won't try to push you into anything.