Where to get help with debt
There are hundreds of groups across the UK dedicated to helping people with debt.
This is our guide to choosing between them to get the help you need.
When is it time to seek debt help?
There's no one tipping point for seeking debt advice. There's a service out there for everyone no matter how much, or how little, they owe and however much, or little, they know about money.
However, there are a number of red flags which might suggest that it's time to seek debt advice, even if this isn't something you've considered before:
- Difficulty paying for the basics. Cutting back to pay a debt is good, going without food or struggling to meet the rent means something is up.
- Confusion about the demands lenders are making. Can't make the sums add up or confused about the rights a collection agency has to recover money? It's time to ask an expert.
- Debt stress. Signs of extreme stress - such as panic attacks and sleeplessness - are more common among those with debt problems than they are in the general population. Debt advisers as well as doctors could help.
Where to seek help
Advice, much of it free, is available for any level of debt from a variety of sources including specialist debt charities, money advice charities and local authorities.
Face to face advice
Many people prefer to sit down with an adviser face to face to talk through a debt problem.
Here are some of those face to face services:
- Citizens Advice England and Wales
3,500 centres across the UK.
- Citizens Advice Northern Ireland
28 big centres and 110 other outlets across Northern Ireland.
- Citizens Advice Scotland
61 centres across Scotland.
- Christians Against Poverty
51 centres across the UK.
- Local authorities also have details of debt advice services available in the local area.
Help over the phone
Calling for advice is also a popular option, especially as a first step or for very specific debt problems.
Here are some highly rated phone advice services:
|Debt Advice Foundation:
0800 043 4050
|Monday to Friday 8.00 am to 8.00 pm, Saturday 9 am to 5 pm|
0808 808 4000
|Monday to Friday 9.00 am to 9.00 pm, Saturday 9.30 am to 1 pm|
|StepChange (formally CCCS):
0800 138 1111
|Monday to Friday 8 am to 8 pm, Saturday 8 am to 4 pm.|
|Debt Support Trust:
0800 085 0226
|Monday to Friday 8 am to 7 pm|
0800 280 2816
|Monday to Friday 8 am to 9 pm, Saturday 9 am to 3 pm|
Help for specialist groups
Debt advice services can't be all things to all people so it's good to know that there's specialist help available too.
For example, Citizens Advice provide a specific microsite - Advice4me - which pools the information from its existing self-help website into a comprehensible online source which specifically targets the under-25 age group.
Gingerbread, a charity set up to support single parents, offers guides that provide guidance and advice on all aspects of personal finance from income support to managing monthly bills.
And Gamcare provides help for anyone suffering with debt because of a gambling problem through an online forum and a telephone helpline between 8am and midnight, seven days a week.
See our gambling and borrowing guide for more on Gamcare and similar services.
Additionally, there are rules in place to help protect vulnerable borrowers, such as people with mental health issues or capacity limitations, which include additional rules for those struggling with debt, see our guide on how lenders should protect vulnerable borrowers for more on this specifically.
As we mentioned above, help specifically targeted at people in your local area may also be available.
How debt advisers can help
Debt advice can take many forms, from informal hints on paying back borrowing - like our tips on coping with debt - to structured debt repayment plans like IVAs and even bankruptcy.
In and outside of the system
Debt advisers should always start just by talking through the debt problem.
After that point, many may be able to act on your behalf or set up arrangements when dealing with creditors.
However, a number of these debt management solutions place the debtor outside the mainstream of normal financial systems and repayments. Essentially, they draw under the debt and start again.
Drawing that line has potentially far-reaching consequences.
Good debt advice will always look to see whether debts can be repaid without having to resort to these methods. Sometimes options such as IVAs, bankruptcy and administration orders do represent the best way out of debt but they should never be entered into lightly.
Non-charity debt help
It may not have escaped your notice that all the debt advice bodies we've mentioned above are charities.
On top of these charities, however, there are a huge number of commercial debt management companies (DMCs) looking to help people deal with their debts.
So what, aside from obvious, is the difference between these for profit companies and the not for profits?
DMCs: the difference
Actually, the difference is that obvious: DMCs are businesses that make money, usually in the form of fees, for helping people manage their debts.
Charging fees to people already in a debt crisis is as bad as it sounds.
Those fees could mean it's extra months or years until you're debt free.
In addition, like secured consolidation loans, which we look at here, DMCs normally take one monthly payment and negotiate and distribute it among creditors.
As we noted above, debt management schemes take people outside of the financial system and commit them to a very specific form of repayment. They're not for everyone.
David Rodger, Managing Director of Debt Advice Foundation, has gone into the key differences between debt charities and debt management companies here in more detail for us here.
More serious failings
In addition, a small proportion of the debt management industry has a reputation for more serious failings.
In late 2011, the Office of Fair Trading (OFT) told many DMCs to clean up their act.
The OFT found numerous failings in the sector from how the services were being advertised - in many cases, misleadingly, as if they were free - to the quality of the advice offered.
As we've said above, debt management companies were accused of favouring profit-making debt solutions, which they then take a cut of, over other, sometimes more effective methods.
The Financial Ombudsman Service (FOS) says it saw a 25% increase in the number of complaints about the sector in the last quarter of 2010, compared to the previous year's final quarter.
All in all, given the amount and variety of free debt help that's available staying away from DMCs seems prudent.