We've all seen the adverts on television and in the local newspaper promising to help us overcome our debt and put us on the road to financial freedom simply by doing this or sending them that.  Unfortunately, these companies are not the way out of debt.  As a matter of fact, they could easily be the way into deeper debt.  Everyone has advice on how to handle your debt, but you have to be careful what advice you actually take and listen to.  Not all of it is valid, and some of it is actually very dangerous.  The only good place to get debt advice is through a reliable, legitimate, and licensed debt management service that can offer you a professionally managed debt plan. 

So how do you know what is a good service and what isn't? One place that is competent and reliable is voluntary sector money advice organisations that work with non-profit-making debt service centres in the community.  These centres do not charge you to help you set up a debt management plan to help you solve your financial problems, and if they do, you are at the wrong place.  Yes, there are some fee based debt management firms, but they too are licensed by the government and they should not carry any term in their name to make you think that they are the non-profit making centres.  You can also use professionally competent and regulated financial advisors to help you set up a plan. 

There are some distinct warning signs you need to watch out for when attempting to choose a debt management agency that can help you manage your debt and not hinder you.  These signs include:

• Companies offering to write off 90% of your unsecured debt of £10,000 and repaying the outstanding balance with no interest.


• Agencies that offer to write off all of your debts in five years for as little as £200 per month or one low monthly payment


• Companies that offer to lower your monthly payment between 30 and 60%.


• Payment made by cheque or money order.


• Claims that they can solve your money problems without a loan.

Debt management firms really cannot promise to lower your monthly payments by some percentage, because everyone has different debt and a different set of creditors.  How much your debt is actually lowered depends on what type of terms the creditor will take.  30 to 50% is considered by the creditor as a 'hardship' and it will ruin your credit.  Additionally, no firm can give you a firm idea of how long it will take to pay off your debt unless you are taking out a consolidation loan with specific set terms.  And if you plan on seeking a mortgage in the future, you need to make sure the firm you are using is reliable or else you will never get the house of your dreams. 

Never use a firm that requests payment up front and if you are unsure about the reliability of the debt management company, thoroughly research them before contacting them to make sure they are who they say they are. Alternatively, use one of our vetted agencies, by completing the form on this website, where you can be assured of a professional service.