Can A Debt Advice Bureau Help Me

If your struggling with debt problems and they have reached a stage where you can no longer manage them on your own then, seeking outside help is an option you may wish to consider. One such option is using the services of a debt advice bureau.

A debt advice bureau is a non profit organization that provides a number of services that can help people solve their bad debt problems. Their services can range from offering advice on dealing with your debt, learning how to budget and lower your costs and money management courses. They can also help you negotiate with your creditors to either lower or freeze interest rates on your loans or credit card debt.

What A Debt Advice Bureau Can Offer

A debt advice agency can also offer to put you on a debt management plan. This type of plan is a signed agreement between you the debtor and your creditors. The bureau will manage the plan. They will work on your behalf to negotiate with your creditors to reach an acceptable agreement to make your monthly payments more affordable.

You pay one monthly installment and this amount is then distributed or shared out to each of your creditors. The advice bureau will also be responsible for managing the distribution of these payments. It is important that not all your creditors have to sign up to this plan and they may still contact you to repay what you owe them.

Also, debt management plans only work for unsecured debts. This is debt that is not guaranteed by an asset such as your house. Unsecured debt would be credit card debt and personal loans. Therefore, secured debt such as a mortgage would not be covered. In certain cases creditors who agree to the plan may offer to freeze or stop the interest charges on your debts.

The benefits of a debt management plan are:

• only one monthly payment to make
• your repayments become more affordable
• creditors that agree to plan will stop chasing you
• once you complete the plan your unsecured debt is cleared

The downsides:

• not all your creditors have to join and they can still contact you for payment
• you must pay the debts off - they will not be written off
• secured debts like mortgages or not covered

The bureau may also advice you on other debt relief options such as;

Debt Relief Orders

A debt relief order protects you from your creditors chasing you for a period of up to 12 months. This means that any creditors on the order cannot contact you are take legal action to retrieve what you owe. To do so they will need to apply for permission from the courts.

The debt relief order gives you a one year breathing space to sort out your financial problems so that by the end of the 12 month period you are in a position to pay off the debts you owe.

There are certain conditions to qualify for a debt relief order;

• You must be in debt  are unable to pay it
• Your debt levels are under £15,000
• The total value of your asset do not exceed £300
• Your net monthly income does not exceed £50
• Have lived in England or Wales for the last three years
• Have not been subject to an order in the previous six years

Debt Advice Bureaus To Use And Avoid

When making a choice be careful as there are bureaus that you should consider using and others that you should avoid.

Bureaus To Use

The best to consider or bureaus that are non-profit or charity run. New government regulations have given them extra powers to stop debt collection agencies and bailiffs harassing you for up to thirty days. This will only apply if you are seeking help to solve your debts. The grace period will keep your creditors off your back for 30 days to help you get your finances in order. When you use a non profit debt counselling service they will contact your creditors and advise them not to contact you for 30 days.

The following are the contacts details of agencies that may be able to assist you further:

Citizens Advice Bureau

Find a local citizens advice bureau in your area

Link:  http://www.adviceguide.org.uk/index/contact_us.htm

Consumer Credit Counselling Service

Phone: 0800 138 1111

Link:   http://www.cccs.co.uk/

National Debt Line

Phone: 0808 808 4000

Link:  http://www.nationaldebtline.co.uk/

Bureaus To Avoid

The commercial debt advice bureaux should be avoided or at the very least approached with caution. These ones are not hard to miss as they are constantly advertising on the TV, radio and in the press. The hard sales approach should raise a red flag and what they sell is mostly false hope.

Commercial debt advice bureau nuisance calls are common. They ring you up when you are more likely to be at home usually when you are about to sit down for your dinner. Many just use recorded messages. The best thing to do is say "no thanks" and carry on with your dinner.

Many of the services they push and charge for are:

• bankruptcy debt management
• debt consolidation loan
• credit card debt consolidation

There aim is to lower your debt levels by spreading them over a longer repayment period. Yes, your monthly payments may seem more affordable and this looks very attractive if you are finding it difficult to make ends meet. However, by stretching the repayment period they make more money out of you. In the end the total debt that you pay back with the added interest can be considerable.

Realize, these commercial debt management bureaus are there to make money from you they are not helping you out of the kindness of their hearts.

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