UK Debt Management Companies

You are sure to see plenty of advertisements for UK debt management companies, but it's important to know the distinctions between the different services that are on offer, especially when you are in a difficult financial situation. Standard UK debt management companies are privately owned companies that charge a fee for arranging a repayment plan for you and liaising with your creditors on your behalf. The fee will usually be a one-off fee of around £200, with possibly also a small monthly fee. Beware of debt managements that aim, through their advertising, to appear to be charitable organisations, such as the consumer credit counselling service.

If debt management companies are unable to help you to manage your debt, the next step would either be to file for bankruptcy, or to enter into an individual voluntary agreement (IVA). Bankruptcy and IVAs are different from the services offered by UK debt management companies in that they are legally binding, and, with certain conditions, your creditors would have to participate in the plan. If you were going ahead with either of these, you would take on an Insolvency Practitioner to manage the process. The idea of an IVA is that it does not carry the stigma of bankruptcy, and that your creditors should be able to recover more of the money that you owe than if you filed for bankruptcy. If you would like to find out more about UK debt management companies, please fill out the short form below to request a callback.

Find UK Debt Management companies today!

What do UK Debt Management Companies do?

• Firstly, the company that you employ would sit down with you and work out exactly how much you owed and to whom.  They would help you to prioritise the debt, either by repayment deadlines or by debts with the highest interest, and then contact your creditors on your behalf to explain the situation and suggest a realistic repayment plan based on your current disposable income. 
• In situations where you are paying an extremely high rate of interest, such as when you have credit card debt (typically 17.9% interest) or a short-term unsecured loan, UK debt management companies may have the ability to reduce or even freeze the interest that you are paying. 
• UK debt management companies help to reduce the stress of debt by halting all contact from your creditors. If you are being called repeatedly by credit card companies or loan providers, they would not then be allowed to contact you directly but would have to liaise with the debt management company.