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Debt Management Companies
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?
Answers
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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.
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.
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 !
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.
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.