If you’re having problems paying back your loans or credit card bills your first step should be to get in touch with the bank or card provider. If your debt problems are serious or if you’re struggling to cope, contact a free to use debt advice provider.
Where to go if you need help with debt
There are several debt advice services that won’t charge you a penny in fees. It’s a much better idea to use them than to pay for advice, as if you use a charity, more of your money goes to pay off your debts.
SAVVY TIP: If you’re using a search engine for debt advice be very careful about Googling ‘Citizens Advice’ or National Debtline. The companies that come up in the sponsored links may be fee charging debt advice companies that have similar names or that have paid to rank well on those search terms.
Citizens Advice: The main way to get advice is face-to-face with an adviser. However, the charity is developing a national telephone advice service. It’s currently available to people who live or work in Wales (on 03444 77 20 20) and is being rolled out in England. If you live in England and ring 03444 111 444 you will be told whether or not the telephone service is live in your area. If you live in Scotland, contact Citizens Advice Scotland.
SAVVY TIP: You normally have to book to get an appointment with your local CAB although you may also be able to access help if you are able to queue. Once you’ve had your initial appointment you may have a wait until your next one.
National Debtline: This debt advice charity offers advice on the phone on 0808 808 4000 or online. It has a debt advice remedy called ‘my money steps’, where you can input details of your own income and debts and be given advice on what to do.
SAVVY TIP: You have to give a valid email address as ‘my money steps’ sends you reminders about the steps it’s recommended that you take, but you don’t have to give your full name or address. You don’t have to fill in all your details in one go as the information will be saved.
Payplan: this isn’t a charity but it does provide free debt advice. It uses a similar funding model to Stepchange in that it is funded by lenders (such as banks and credit card companies) rather than by customers.
SAVVY TIP: Payplan offers free debt advice over the phone (on 0800 280 2816) or online.
Stepchange: This charity provides debt help and advice over the phone on 0800 138 1111 or online via its online debt remedy tool. Stepchange doesn’t get government help but is funded by banks and lenders. If you sign up to a debt management plan creditors can make a donation to Stepchange (but they don’t have to) and this pays for the entire advice service – including those who don’t go on a debt management plan.
SAVVY TIP: With debt remedy you have to give your email information but it is anonymous. It takes around 20 minutes to fill in and you will be given a series of recommendations at the end of it to deal with your debts. Stepchange also has specialist mortgage debt advisers and services for people who are self employed.
Companies that charge a fee
There are dozens of debt advice companies that charge you a fee. Time and again it’s been found that a number of these flout the law and guidelines.
Personally, I’d rather talk to a provider of free debt advice because – even if the fee charging company does give good advice some of the money you’re setting aside to pay back what you owe will be used in fees.
- Typical fees: A fee charging debt advice company will typically charge: the first two months’ payments plus an ongoing fee of 15% of the money you pay.
- Banks have made a commitment to work with debt advice charities. Banks will also deal with reputable fee charging companies if you ask them to.
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