A friend in debt

sat56

After some advice for a friend.

The details i have is £5000 pounds on credit cards and she has been approached by Personel Debt Helpline. Who say pay £300 a month for 17 months and they will freeze the card interest.

Havent done much research yet but there will be fees somewhere no doubt, How much?

Is there a better company to speak too?

Wot is her first step to take?

As far as i know there are no missing or late payments yet.

Not being in debt myself ive no idea how these companys operate so any advice would be welcome.

Thanks

climbgirl

They will take a cut of the money as fees for themselves. There are debt charities that will help you set up a debt management plan for yourself - so all the money you pay goes toward the debt, not to line the pockets of the debt company! Use one of these (CCCS and Payplan are two used a lot on this forum).

Ask yourself - if they've approached your friend, what's in it for them?! They're not helping your friend out of the goodness of their heart...

sat56

Thanks for that, i knew that they would be takin a cut somewhere. Trying to get all the info from my friend, suggested a 0% balance transfer using her dad to take out the card. Also im willing to help out a little, but she seems reluctant. Will work on her to contact a charity debtline. Dont want her to trash her credit file also which i assume going to these companys will do

jonjamie1970

They will negotiate terms with her creditors which may leave her in a worse state, the repay back is £5100 so they are paying themselves £100 plus any more they can shave off with full and final settlements.

Jesthar

Hey Sat,

Avoid fee paying companies like the plague! :eek: Why should your friend pay them any money for a service you can either get for free via a debt charity, or do yourself for free?

The fee charging company cannot guarantee interest and charges will be frozen, and historic anecdotal evidence indicates they are LESS successful at getting that done that the debt charities, as when creditors are approached by the debt charities they have the reassurance that ALL the spare money available will be split between creditors, with no extortionate fees deducted.

It may also be the case that the company did not actually know your friend was in debt, but were just fishing - I'm not, but still had a call once asking me if I was aware I could pay off my debts with their help. I just said "but I don't have any debts" - and they hung up on me! :rotfl:

If your friend isn't missing payments, then she may not even need a Debt Management Plan, just to take better control of her spending until the existing debt is paid off. If you can persuade her to post here, we can all help - if not, doing a Statement of Affairs (SoA) and keeping a spending diary will still be very useful for her. You can find a link to our favourite online SoA calculator in this thread:

https://forums.moneysavingexpert.com/discussion/107280

which contains some very good advice for those facing up to debt for the first time.

In the meantime, well done on saving your friend a small fortune!

~Jes

Nicky321

Hi there, maybe a good start for your friend would be an SOA found HERE
When its filled in maybe post the results on here and people will be able to give advice on it. Like others say, theres lots of companies out there just looking for people in debt to feed from. Theres lots of free advice on here and lots of helpful people.

sickasachip13

Her first step would be to run away from this company and ignore their calls! Suggest she talks to CCCS or Payplan. We have recently started a DMP with CCCS and it's been a godsend to help us manage our debts. CCCS have various things you can do online - she might like that as a first step rather than ringing them? This is their website:

http://www.cccs.co.uk/


There is also a 'sticky' thread at the top of the main DebtFreeWanabee page where you can ask a debt advisor specific questions.