Scottish and English debt laws are different, so if you are a Scottish resident and have questions on debt, then this is the place to post.

Moderators: TalbotWoods, JaneClack

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By TalbotWoods
#466773 Maybe you have been talked into an IVA that you are finding extremely hard to pay each month? Maybe you are on a scheme where a company is taking a monthly fee to 'pay' your creditors off? Maybe you are paying for debt advice?

The Financial Conduct Authority (FCA) has highlighted that they are painfully aware that some Debt Management Firms are persuading people to sign up for "unsuitable" and expensive repayment plans (Some plans can cost over £600 per year)

More than half a million of these agreements are started annually, most of them with fee-charging firms, however, free help is available from Citizens Advice, National Debtline, Payplan, StepChange and other charities. This free help is often something the fee-charging firms forget to inform you about!

'Unacceptable'

"Debt Management Firms must start putting consumers first," said Christopher Woolard, the FCA's director of policy, risk and research.

"It's frankly unacceptable that these people who are struggling to make ends meet are being talked into unsuitable plans."

From 1 April the FCA will be taking over responsible for regulating consumer credit and it plans to bring in new regulations.

These include a requirement for firms to provide customers with information on how to get free debt advice and for firms to pass more money on to creditors right from the start of the plan.

Debt Management Firms gather up all a consumer's debts and pay back the creditors on that individual's behalf. They take their fee out of the borrower's money as it comes in each month.

Not a new problem though!

Back last year the Lloyds Banking Group, and the charity Money Advice Trust by Loughborough University, found that this was mainly due to the poorer methods being used by firms that charge. This is on top of the extra costs associated with the plans, often hidden as administration charges.

The study interviewed 1,003 people including those either in DMPs, (sometimes disguised as other plans; some of which were inferring that the scheme was formal when they were not), or who had been in one in the past five years.

One respondent was paying £400 each month into a debt management plan, of which £300 was being kept as a fee/administration charge by the debt management company; another was charged an astronomical £662 set up fee before even a single penny went to the creditors. Unfortunately these are not uncommon practices.

Some other findings that came to light, included:

  • Fee Charging companies adopting a ‘skimmed surface’ approach to budgeting, with little or no discussion about affordability, and in some instances the company had taken the paperwork and then TOLD the client what they wanted each month!
  • Fee Charging Companies were deliberately putting people onto plans, when alternatives such as bankruptcy or DROs are more appropriate. Additionally they were not entering into discussions with the client to offer support and help in improving financial situations.
  • A number of the fee charging companies organising Debt Management Schemes, failed to make any payment to the creditors, before entering into bankruptcy themselves or disappearing because they are unlicensed and bogus.

It has and always been accepted that people can use either free or fee charging companies, but a couple of thoughts come to mind with this slice of news:

  • How will creditors and DCAs look on it, will they hassle and refuse to accept people who are using fee charging companies. Very possible.
  • Will the creditors and DCA’s be more accepting and work with the clients of the free to client Debt Management Plans, like those offered by Payplan and CCCS. Very Probably.


If you are with a Fee Charging Debt Management Firm now, and would like to look at real alternative options, then we suggest you contact one of the organisations below, who will ensure that ALL your monthly payments reach the creditor.

If you are thinking of looking at entering into a Debt Management Plan, then again please contact one of the organisations below, who will not keep your money.

"Where can I get GENUINE free advice and help with my debts",

So to help answer this here is a list of the FREE GENUINE debt help organisations in the UK, along with a brief description of what they can offer.

If they are NOT listed then they may initially offer free advice but will charge for any solution, and are NOT recommended by us.

YOU ALSO HAVE TO REMEMBER THAT SOME SOLUTIONS DO COST MONEY, SUCH AS BANKRUPTCY AND IVAs.

We appreciate that some people have received a good service from FEE CHARGING Debt Help Companies, but this post is NOT ABOUT who you should use and who you shouldn't, it is here purely to list the governmental nationally recognised free debt help organisations.



England and Wales


National Debt Helpline
Website = http://www.nationaldebtline.co.uk/
Telephone = 0808 808 4000
Services offered = The helpline that provides free confidential and independent advice on how to deal with debt problems. They offer debt advice for people living in different parts of the country. This is because the law concerning debt varies depending on whether you live in England and Wales or Scotland. You can be confident that the advice we offer is targeted to you.
Can Advise on = DMPs, IVA, DROs, Bankruptcy, Trust Deeds, DAS.


PayPlan
Website = http://www.payplan.com/
Telephone = 0800 280 2816
Services offered = Payplan offers a fresh approach to dealing with financial difficulties. They are proud to be the UK's largest provider of free debt solutions, including free debt management plans and Individual Voluntary Arrangements or IVAs. Advice is given on ALL forms of debt solutions.
Can Advise on = DMPs, IVA, DROs, Bankruptcy, Trust Deeds, DAS.



StepChange (Consumer Credit Counselling Service)
Website = http://www.stepchange.org/
Telephone = 0800 138 1111
Services offered = Over-indebtedness largely results from a change in financial circumstances, caused by reduced income or overuse of credit, although relationship problems and changes in employment status are also common causes. Because of this, their clients are from all walks of life and we are able to offer help and advice to those on high incomes as well as those on low ones.
Can Advise on = DMPs, IVA, DROs, Bankruptcy, Trust Deeds, DAS.




CAB
Website = http://www.adviceguide.org.uk/
Telephone = See website for your nearest office
Services offered = Dealing with money issues can sometimes be off-putting, but if you don't understand how things like credit or mortgages work, you could end up losing out financially or getting yourself deep in debt. But you can avoid losing money and getting into debt if you have enough information to make the right choices. CAB helps you find the information you need, including help to deal with your debt problems, how to avoid losing your home and how to get your finances back into shape.
Can Advise on = DMPs, IVA, DROs, Bankruptcy, Trust Deeds, DAS.



CAP (Christians Against Poverty)
Website = http://www.capuk.org/home/index.php
Telephone = See Website for your nearest office
Services offered = Christians Against Poverty is a national debt counselling charity with a network of 150 centres based in local churches. CAP offers hope and a solution to anyone in debt through its unique, in-depth service. This service is available to anyone irrespective of faith or religion. Though it is a free service it relies on donations, which if you can afford they would like you to contribute to.
Can Advise on = DMPs, IVA, DROs, Bankruptcy.




Additional for Scotland


AIB (Accountant in Bankruptcy)
Website = http://www.aib.gov.uk/
Telephone = 0300 200 2777
Services Offered = Accountant in Bankruptcy (AiB) is responsible for administering the process of Personal Bankruptcy and recording Corporate Insolvencies in Scotland.
Can Advise on = Bankruptcy, formally Sequestration .



Money Advice Scotland
Website = http://www.moneyscotland.gov.uk/das/MoneyScotland/Homepage
Telephone = 0300 200 2600
Services Offered = Worried about debt and in a muddle with money? Whether large or small, debts can cause you misery and feel like a weight around your neck. But you're not alone. They can help you lift that weight with impartial and confidential advice, whether you're in debt or are owed money. They can also help money advisers who are looking for better ways for their 'can pay' clients to manage their debts. And they can assist employers with learning more about the debt payment process.
Can Advise on = DMPs, IVA, DROs, Bankruptcy, Trust Deeds, DAS.





Northern Ireland


AdviceNI
http://www.debtaction-ni.net or http://www.adviceni.net
Advice NI is a membership organisation that supports the independent advice sector in Northern Ireland. They have almost 70 members that provide free, confidential and independent advice services. Their members provide advice on social security, housing, employment, tax, debt and legal issues. Debt Action NI is a project that offers free, confidential, face to face debt advice services across NI. There are 19 money and debt advisers in 13 Council areas providing 600 hours of debt advice on for example credit card debt, mortgage arrears, rent arrears bank loans, store cards and so on.
Can Advise on = DMPs, IVA, DROs, Bankruptcy.


Citizens Advice Northern Ireland
http://www.citizensadvice.co.uk/
Citizens Advice is the largest advice charity in Northern Ireland, working against poverty and meeting the information and advice needs of some 92,000 people per year and dealing with over 320,000 issues across a wide range of advice categories. Advice is available to all communities from 31 main offices across Northern Ireland and from over 100 other outlets. They also represent the public at some 1800 social security appeal tribunals a year.
Can Advise on = DMPs, IVA, DROs, Bankruptcy.


Debtline NI
Consumer Credit Counselling Service (CCCS)
Tel: 0800 027 4990
http://www.DebtlineNI.org
Over-indebtedness largely results from a change in financial circumstances, caused by reduced income or overuse of credit, although relationship problems and changes in employment status are also common causes.Because of this, our clients are from all walks of life and we are able to offer help and advice to those on high incomes as well as those on low ones.
Can Advise on = DMPs, IVA, DROs, Bankruptcy.


Advice4debtNI
http://www.advice4debtNI.com
Tel: 0800 917 4607
At Advice4DebtNI they understand that the pressure of dealing with debts can leave you feeling stressed and isolated. It can be difficult to know where to turn but you have made the first step in addressing your problems by looking for help. There dedicated team of trained advisers have years of experience in dealing with debt and will support you every step of the way to resolve your debt problems

Can Advise on = DMPs, IVA, DROs, Bankruptcy.



[Sources:

BBC: http://www.bbc.co.uk/news/business-26692111
Money Advice Trust: http://www.moneyadvicetrust.org/Pages/default.aspx
Credit Today: http://www.credittoday.co.uk/article/14 ... ly-to-fail ]