Help - im new - who is the best debt management company

Iwanttobreakfree12
Iwanttobreakfree12 Posts: 1 Newbie
edited 6 February at 9:25AM in Debt-free wannabe
Hi
Its getting to the point where i need to just get a debt management company to help with a debt management plan.
I need to pay for my debts as one monthly payment as the list of payments i have to pay at the end of each month is too long plus interest is more than my minimum payment and companies will not put me on interest free as i have already tool advantage of a 9-month interest free period and the interest is now drowning me.
i owe around £8k with different credit card providers, store accounts and overdrafts.
my credit score does not allow me to apply for a debt consolidation card or loan so i need some help and advice to see what debt management company is highly reputable and low in cost.
have just made enquiries with ‘Debt People’ and ‘Money Advice’
should i be using these or do you recommend another service? 

Appreciate any feedback at all and thank you for reading my first post.

Comments

  • Brie
    Brie Posts: 9,290
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    Well done for facing up to the issue.  

    First thing to do is to have a look at the statement of accounts on the first sticky and fill that out.  Then post back here if you're ok with it.  Lots of people will be able to help tweak your budget to help you deal with the debt.

    Next you might want to get involved with a debt advisor.  There's free services available.  StepChange, National Debtline, Community Money Advisor (CMA), that will help you manage your debts.  With them involved your creditors are more likely to accept minimum or token payments. There's no reason you should need to pay someone to help you deal with your situation.  
    "Never retract, never explain, never apologise; get things done and let them howl.”
  • RAS
    RAS Posts: 32,461
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    Please do not use a a debt management company, you'll pay £xxx for the privilege of getting something that can be arrange fee free from one of the debt charities, or even done yourself.

    You are in the wrong part of the forum, perhaps @sourcrates can move your thread?
    The person who has not made a mistake, has made nothing
  • sourcrates
    sourcrates Posts: 28,536
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    RAS said:
    Please do not use a a debt management company, you'll pay £xxx for the privilege of getting something that can be arrange fee free from one of the debt charities, or even done yourself.

    You are in the wrong part of the forum, perhaps @sourcrates can move your thread?
    I have asked for this to be moved.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,229
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    For now I'll just throw Payplan and Christians against Poverty into the mix as providers of free dmps.
  • Rob5342
    Rob5342 Posts: 1,357
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    I'd advise just doing it yourself, Stepchange seemed like a good idea too start with, but really they caused more problems than they solved. 
  • Rob5342
    Rob5342 Posts: 1,357
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    Brie said:
     StepChange, National Debtline, Community Money Advisor (CMA), that will help you manage your debts.  With them involved your creditors are more likely to accept minimum or token payments.   
    Thats incorrect, on a DMP you simply pay what you have available, there is no acceptance involved. If you do it yourself you can pay exactly the same payments you would with Stepchange.

    Using Stepchange makes things far worse for you in the long run. They advise starting repayments straightaway instead of defaulting first, so you are more likely to get arrangements to pay which ha.your credit report for much longer. They also want you to treat creditors equally, so you can't take advantage of settlement offers, and they don't get involved with making CCA requests.

    I used Stepchange initially and because I followed their advice I have a default that will be on my credit report for two years longer than it needs to have been. I also have £17,000 worth of debt that is unenforceable, but if I'd stayed with Stepchange I'd have paid that all back unnecessarily.
  • fatbelly
    fatbelly Posts: 20,229
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    edited 6 February at 8:03PM
    Creditors are not allowed to treat debtors differently whether they are self-managing or using a debt management company

    It's in CONC7. If there's any evidence any of them are doing this it should be passed to the FCA.
  • EssexHebridean
    EssexHebridean Posts: 20,867
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    Rob5342 said:
    Brie said:
     StepChange, National Debtline, Community Money Advisor (CMA), that will help you manage your debts.  With them involved your creditors are more likely to accept minimum or token payments.   
    Thats incorrect, on a DMP you simply pay what you have available, there is no acceptance involved. If you do it yourself you can pay exactly the same payments you would with Stepchange.

    Using Stepchange makes things far worse for you in the long run. They advise starting repayments straightaway instead of defaulting first, so you are more likely to get arrangements to pay which ha.your credit report for much longer. They also want you to treat creditors equally, so you can't take advantage of settlement offers, and they don't get involved with making CCA requests.

    I used Stepchange initially and because I followed their advice I have a default that will be on my credit report for two years longer than it needs to have been. I also have £17,000 worth of debt that is unenforceable, but if I'd stayed with Stepchange I'd have paid that all back unnecessarily.
    It's perfectly possible to go to Stepchange for the initial advice, then step back, stop paying, and let things default before going back to Stepchange for the DMP though - it's not a black and white "you have to go with us for it right now or the ship will have sailed". the period of time between establishing that a DMP is right for you and actually entering in to it can be used for all the necessary stuff - emergency fund building, ideally if finances allow a Fighting Fund too (for future Full & Final offers), and CCA requests as well. 

    Some people find that they can manage things themselves perfectly well, others feel entirely overwhelmed and need it handled for them initially - but many of them also subsequently find they have the confidence to take back control and self-manage. It's not a "one size fits all" and what works for one person will be very different for someone else. 

    OP - I would echo Brie's suggestion about the SOA - the link to the calculator we suggest using can also be found in my signature below. You need to make it accurate, open and honest, and it should reflect your situation right now - not what you think you should be spending or what you imagine we expect to see there - that doesn't help anyone, and least of all you! It may help you to get together a year's worth of bank statements and credit card statements and use those to help properly inform what you have been spending. once done, if you use the "format for MSE" option you can copy & paste it into the thread. 
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    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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  • Rob5342
    Rob5342 Posts: 1,357
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    EssexHebtidian, you are right, but I think people need to understand that the approach that Stepchange takes can be very detrimental in the long term before they sign up with them. There's no harm in using them after you default, but if you go straight into a DMP like they recommend it can make things a lot worse than they need be  I say this from experience as I went straight into one with them without defaulting or building up an emergency fund.
  • sourcrates
    sourcrates Posts: 28,536
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    As regards the debt charities, their funding comes mainly from the creditors themselves, one of their conditions of use is that arrangements are put in place as soon as possible, this does not always sit well with everyone, as we all know.

    Its a compromise, you either use a debt charity and conform to their rules, or you go with a fee charging debt management company and pay for the privilege, which is never a recommended choice.

    The only way to benefit both yourself and your credit file is to go it alone and self manage.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
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