Debt buster-type companies - are they a con??

[ali_alic]

My boyfriend started up his own company 3 years ago but has now had to fold. A lot of the debts were in his name. He has sold the assets of his company and paid a load of the bills but there are still some outstanding. He owns a house with a mortgage of �500 per month and has now taken on a job that pays �260 per week. He has personal credit card debts mounting to 15K plus finance on his vehicle plus a few other finance agreements - all under his name. These companies that offer to consolidate the debts and maybe reduce them (using govt legislation) - are they on the up??

[Kathyan]

Be very careful before approaching the companies that advertise on TV. Tell him to ring your local CAB or contact the National Debt Helpline before deciding what to do. We got into an IVA by ringing these people and it was the worst thing we ever did. We were given the wrong advice and it has cost us!

[rugeleyboy]

very good advice from Kathyan,

however.... my friend had a a shop and it folded, he went to a voluntary liquidation company and they bundled up all his bills and debts and made an offer to all the companies he owed money to and he was paying a set amount per month wiich was affordable?

[SLUGGER.U.K]

I know its hindsight but if your boyfriend had been trading as a limited company rather than a sole trader/proprietor he would not have to pay any of his business debts. My advice is when going into business especially one that gives credit to people is always start or create a limited company just incase. I had a similar problem 7 years ago and had to close my company due to bad debts {ppl not paying me for work/services carried out} Luckily the liquidator/insolvency practioner told me to "just walk away"..... I did and they took over leaving me free to carry on my life and start again {in a different business}. As far as getting on with your lives both kathyan and rugeleyboy have sound advice... always go to CAB first as they are a voluntary/free advice centre most of the others will try to take money from you you havnt got to manage you debts or all some other debt help companies want to do is to offer or sell you a remortgage at much higher rates than normal to pay off you debts so be very carefull. Its not a very nice thing to go through so i wish you well and all the best