Debt Advice companies vs Charities

Kubadre

Hello,

As I'm dipping my toes in various means of help that's out there my online algorithm is now bombarding me with various companies that promise help with clearing debt. I actually have been on the phone with one of them - DebtFree4Me and they've offered me advice very similar to the one i got from Business Debtline 
I see a red flag when company starts calling me three times a day and seems desperate to get me involved with them.
I haven't agreed to anything as I'm still educating myself and gathering information but maybe somebody knows, if there is a catch, what is it??

sharpe106

Think about it logically, how does the debt advice company make it money? Calling you 3 times a day will give you a pretty good clue. If you can do it yourself great if you need assistance go to the one of the charities. 

RAS

Expect substantial fees from debt company, and don't get surprised if they take all the fees before they make a single payment to your creditors, who will be p-off by that time.
Unless you do an IVA, debt charities don't charge fees,  and they pay your creditors from the beginning (After a little set up time). 

Avoid, like the plague.

Galloglass

Interesting company. Changed name last month to My Debt Plan. Director was involved in this one
https://app.duedil.com/company/gb/07432012/finance4me-limited
https://beta.companieshouse.gov.uk/company/07432012/officers

Clearly knows how to fold companies.

FCA register has a bit more information about the people involved.

Kubadre

That all confirms what I thought
It was more instinct not to work with them, just needed some facts to back it up.

Thanks all

sourcrates

Any debt management company that is not a charity, or funded by creditors, is a buisness out to make money.

They are not really debt advice companies, you should only take advice from a sourse with nothing to sell you, they are salespeople, out to sell you a product, in this case a debt solution.

Now most debt solutions have fee`s attached anyway, except a DMP, which are administered free by the debt charities, a debt management company will charge a set up fee, and an ongoing monthly fee, to "manage" your account.

The one arrangement these companies love to sell you, are IVA `s (individual Voluntary Arrangement) as the fee structure is set by the individual company, (for Bankrupcy & DRO, the government set`s the fee) they can charge you whatever they like basically, this is the reason IVA`s are mis-sold by the bucket load, and just for information purposes, an IVA can be a good choice under certain circumstances, they were designed with homeowners in mind, who have massive debts, but could not go bankrupt for fear of losing their home, so unless you fall into that catagory, or you have 30k plus of debt, and cannot go bankrupt for another reason, look elsewere.

Alicekimbo

I find myself in a similar position. I have £13k debts and did have a plan set up with debt change but the reality is i couldn't afford the amount. I’ve been offered an IVA by a company called ‘Financial Support System’ but i honestly don’t know who to trust or what is best for me?!

monetxchange

Alicekimbo said:

I find myself in a similar position. I have £13k debts and did have a plan set up with debt change but the reality is i couldn't afford the amount. I’ve been offered an IVA by a company called ‘Financial Support System’ but i honestly don’t know who to trust or what is best for me?!

Do you mean Stepchange rather than Debt Change? Stepchange are a legit and very helpful debt charity. Get back in contact with them - if you couldn't afford the monthly amount or you can't now due to circumstances changing, just tell them and they'll work through your options. They'll be used to it, especially at the moment. Don't waste your money and time with these companies out to "solve" all your debt problems. The debt charity you CAN trust.

Galloglass

If you are concerned about any company claiming to offer advice then look for their FRN number. It will be on their paperwork or website. If it is not there - walk away.

You can check for the FRN number here https://register.fca.org.uk/

Look what it says and what they are authorised to do and if this not on the register - walk away.

PS A search for "Financial Support System" comes up blank on the register, so you know what to do.

sharpe106

Alicekimbo said:

I find myself in a similar position. I have £13k debts and did have a plan set up with debt change but the reality is i couldn't afford the amount. I’ve been offered an IVA by a company called ‘Financial Support System’ but i honestly don’t know who to trust or what is best for me?!

Start your own post and give a bit more information and I am sure oothers can assist you.

sourcrates

Alicekimbo said:

I find myself in a similar position. I have £13k debts and did have a plan set up with debt change but the reality is i couldn't afford the amount. I’ve been offered an IVA by a company called ‘Financial Support System’ but i honestly don’t know who to trust or what is best for me?!

You do not want to take an IVA for the reason stated in my post above, you have far too little debt for starters.

Post an SOA in a new thread, and we can make more helpful suggestions for you.