Debt Management Companies

[mercury]

Hello Beautiful People

Ive just today joined up with a debt management compnay as my cards, loan etc were gettin out of hand. The way they work is that i pay them a lump sum an they distribute that to my loans card companies. I was just wondering if anyones ever heard of them/used them or works even for them? There called debt free helpline. Im just slightly dubious. Thanks
ps how does this affect credit rating?

[Carol Anne]

They're only another loan company selling you yet another loan, albeit to pay off your other ones. You haven't said how much and at what rate, or if it's secured on your home but my guess is that when all is said and done your'e in the same position as before ..... still in debt! Don't mean to sound unhelpful , but while you're paying this off you'll probably be tempted to use your cards again now they're clear and end up even deeper in it. Do yourself a favour: cut them up, all of them and stick to cash. Pay off your consolidation loan and try to lead a debt free life.

[kemlyn]

Hi

With regards to your query debt management companys are fine they do not loan you money and also advise you against doing this.The aim is to get you debt free within around 5 years by paying a regular monthly amount (only what you can afford) they then negotiate with your creditors.FREE OF CHARGE!

Well known companys for example CCCS you will be fine they work out a spending budget,re payment plan with you.CCCS let you forward demanding letters etc that you recieve from your creditors,they will also phone your creditors if needed etc,

Im not sure about Debt Free Direct, Are they charging for there service or is it free?Dont continue with them if they charge.Ive been with CCCS for 1 year I owed 32.000.00 on cards and loans and I still live with my parents!

Good Luck Any Questions just ask me.

Your credit rating will be affected,it depends on various things like how many missed payments,if you recieved any default notices ,ccj's etc but as a guide your credit rating will be affected and can stay with you for a minimum of 5 years AFTER your debts are cleared.

[jason1980]

Hi I understand your question. Your debts are getting out of hand, you want them cut & the debt management says they can cut it right down to what you can afford to spend. You pay them a monthly fee that they distribute to those you owe money to.

Well. Hefty interest is still added to your debts taking longer to pay off, the debt management company take a cut of your monthly fee also.

My advice would be to quit the management comapny and write a letter to each of those you owe money to stating what you can afford to pay a month even if it is less than their minimum payment amount. Mention that you had contacted a management company. Either way will affect your credit score, but they wont want the debt management company getting involved.

[spaced]

with regards to your credit rating - it will make it worse than it already is, as these companies are just another loan shark

[itsallyellow]

If you speak to Citezans advice they can do this for you

[andyjevs]

Register with http://www.debtquestions.co.uk/debt_forum/ The kind people on there will give you all the help you need in a non-judgemental way...they've all been there and done it !!!

Good luck.....i'm going through the same myself at the mo !

[jason1980]

Hi in your question it says you pay them, so I am assuming this is not a loan shark - they take 'your' money and distribute it . You aren't borrowing their money. I am right hopefully to assume this is Debt Management & not Debt Consolidation?
In which case this is something you can do yourself to arrange your own smaller payments. Management companies can not stop interest charges, bad credit ratings, or even court action.

[themas]

I assume you are paying these people a fee (i.e. they keep a part of the monthly paytment you send them and pass the rest onto the creditors). This is not the best way of running a debt management plan. You can get it done for free by the local CAB, or by Payplan or CCCS.

[Katiebee]

Here's an answer I gave a while ago about the Consumer Credit Counselling Service. http://www.theanswerbank.co.uk/How-it-Works/Question44243.html

And here's a link to the CCCS. http://www.cccs.co.uk/

Good luck.

[experienced]

I've just answered this question to someone else - I am using a company called Thornton Shepherd Associates tel no 0870 050 5525. They do take a small fee - but I shopped around and these are one of the cheapest if not the cheapest as it is a set fee not a percentage - I am well educated but due to a run of bad luck and a death in my family - this left me in debt They have taken all the presure of me and are also dealing with what are classed as priority debts - gas etc - I have found them to be very ethical and well worth talking to - once you have signed up the admin dept are excellent and they make you feel like a friend - they are professional and I would recommend that you give them a call, I spoke with CAB & CCCS but they couldn't help me and I had to do a lot of the work myself - but as I work full time and have a young family the money I pay them is worth every penny - yes my credit score wont increase but it won't get that much worse either - I've checked with other people - they have stopped interest on my credit cards and have stopped court action - maybe if they all worked like them debt management wouldn't have such a bad name - this company is great - if I lived in there area I would want to work for a company just like them