The Debt Protector

Summary
If you are under pressure from creditors, you need to read this article. It outlines the three main debt advice services and describes the services they offer.

As the United Kingdoms recession grows, debt advisers are being engulfed by people desperately hoping to arrange their mortgage repayments, credit cards and loan repayments. There has been a 40% escalation in people in arrears on secured loans and mortgages say the Government, compared inquiries in two thousand and eight. The Consumer Credit Counselling Service, which additionally offers free debt help, gets over 1,500 calls a day, while calls to the National Debtline are up by over a third. So, if you are burdened with debt worries how can confidential services suits your needs? 

 The Citizens Advice Bureau (CABs) , who are they?  They area a network of more than 3,200 CABs around the UK manned by volunteers. The Majority of these offices have trained debt advisers.CAB (The Citizens Advice Bureau) One of the largest volunteer institutions in the UK equipped to assist in dealing with most problems faced in everyday life including financial management.

1. What do the CABs do?   To start with before they can advise you, they need to appreciate your income and outgoings. So they will assist you to assemble a list of creditors with income and expenditure.

Once this is done, they will determine whether your income can be increased. For example, you may not claiming proper benefits alternatively maybe you are on the wrong tax code. Then they will consider your family outgoings. They look at your household bills and loan repayments to see where you can save cash. They look at your family bills and finance repayments to see where you can save cash. Then they will consider your family expenditure.

Your debts will be categorised into priority debts – that’s payments such as mortgage or rent, council tax and utilities – and your non priority ones, such as unsecured loans, credit cards and HP.

 You will then be guided through the process of setting up an Individual Voluntary Arrangement (IVA) with your creditors.

The adviser at the CAB will then help you to negotiate a repayment plan with your priority creditors – your local authority, utility companies and mortgage lender or landlord. The balance of your income after meeting your family’s other living expenses can be offered to non-priority creditors based proportionately on how much you owe to each of them..

During the negotiations with the unsecured lenders the CAB consultants ask for the charges to be suspended which is usually agreed to by the creditors due to precedent in court rulings. They can also be of assistance if your home is under threat of repossession and with any other court actions. 

 The bad point: more and more of us struggle with our finances, their services are overextended, so you may have to wait weeks, even months, for an appointment.

The good points: The CABs service is generally face-to-face, which means they can deal with the paperwork with you. They can then sit with you while you talk to your creditors. They may also help you deal with the Courts
 The Consumer Credit Counselling Service (CCCS), who are they?  The CCCS is primarily a telephone and online based service, although you can make an appointment to visit one of their 10 regional offices. These are are mainly in the North.

What do the CCCS do? The CCCS will draw up a budget with you to see how much money you you can afford to live on. Then whatever remains can be used to repay your priority debts and then your non-priority debts. More serious cases join the CCCs’s debt management programme. The CCCS will then negotiate repayments with the creditors and ask to freeze charges and interest.

Once in a debt management plan, you make one payment every month to the CCCS and they divide and distribute that money between your creditors thereby deducting the entire amount from your debt.

The good points: Debt management plans are easier to manage than continuing to repay several different creditors yourself. You can anonymously receive online counselling through a question-and-answer service.

The bad points: To enter into a debt management plan you have to have enough disposable income after basic living expenses

The National Debtline (ND), who are they? They are the original telephone-based debt guidance service.
What do the ND do? The ND send you a form to help your budgeting plus suggested letters to send to your creditors. They can also talk you through your money situation and offer information on what your creditors can do legally and suggest ways you can increase your income.

The good points: The service is quick and packed with constructive information offering assisted self-help.
The bad points: They will not speak to your creditors on your behalf. You are on your own.

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