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Choosing A Debt Solution

You’ve taken the major step of acknowledging that your debt has become a debt problem. You’re thinking about how to tackle the problem. You’ve started doing some research into how to deal with it. What have you found so far? Confused?

An enormous mass of apparently conflicting advice exists on the internet. Calling debt advice companies or charities can add to the confusion. Why is one company suggesting an IVA while another thinks you should go Bankrupt? Who has your best interests at heart; the Loan company or the Debt Management company? What is the difference between the “free” debt advice organisations and those that charge fees?

At Bright Oak we deal with thousands of enquiries from people who are ready and sometimes desperate to take the steps necessary to resolve their debt problem. Enquirers are commonly aware of the various possible solutions but very uncertain which are available to them, which would be best for them, and the advantages and drawbacks of each.

This page has been written to start giving you the tools to help you to choose which debt solutions are available to you, which might be best for you and, should you have further questions, provide sources of good advice.

Why is there conflicting debt advice available?

In some instances the conflicting advice on the solutions may result from legitimately held professional opinions from those working in different areas of the debt solutions industry. We all assess the advantages and drawbacks of different debt solutions in different ways so it’s not surprising that different opinions exist. The key point here is that you must take the time to fully understand the solutions available yourself so that you can compare them according to your own priorities. Read up on the various solutions; there’s a summary of each of them available on Debt Divas. Ask questions until you are sure of your understanding; the forum on this website is a unique resource where you can confidentially obtain answers and opinions from various top debt solution experts as well as from those who have personal experience of the solutions themselves. Alternatively the freephone Debt Divas helpline might be able to answer your questions.

I’m sad to say that much of the conflicting advice available is down to the commercial motives of those offering the services. It shouldn’t be the case but it will be of little surprise to you that certain IVA providers lean towards advising clients into IVA’s when they might have been better advised to seek Bankruptcy; certain Debt Management companies have been known to encourage Debt Management Plans when an IVA might resolve the debt problem quicker etc etc. The various debt solution companies featuring on Debt Divas have been selected to provide a rounded view of each of the potential solutions that might be available to any individual. All are committed to providing best advice in the interest of the individual rather than advice biased towards the service that they each offer. Each is represented on the forum and therefore able to contribute in a public way where they feel they can usefully do so. As experts we don’t always agree with each other but we do strive to provide best advice in an open way.

Should you pay for debt advice?

There is no need to pay for debt advice. There are many good debt advice companies and charities that will provide great advice without charging you. The main point to note is that you should pick the provider of free advice that will offer you the highest level of quality advice from an impartial starting point.

Should you approach a debt advice charity or a debt advice company for help?

I feel that this question gets too much attention and is actually less relevant than most people suppose. The main priority for anyone in debt should be to get the very best advice that they can irrespective of who provides it.

Charity debt advisers assess debt problems for individuals and then may refer them to an appropriate debt solution provider. The solution provider will not normally be a charity. We are not aware of any Insolvency Practitioners (IVA’s), Mortgage Brokers, or Loan Brokers who are registered charities. As such a good charity debt advisor is as good as a good private debt advisor; both will link you to a quality provider of the right debt solution for you. Likewise there are bad advisors in both sectors; beware of undertrained or inexperienced advisers (can they immediately and confidently answer your questions?) and beware debt advisers who seem to be pushing one particular solution a little too hard (is it the only solution that they offer/sell?).

Debt Management Plans are the exception to the similarity described above. The CCCS provide debt management plans to individuals without charging them management fees. This is achieved by the CCCS being paid by your creditors a percentage of the cash that they collect from you. Supporters of this arrangement state that this will help you to clear your debt quicker. Opponents of this arrangement fear that your “free” representation comes at a cost; have you employed a Debt Management Company that represents your creditors rather than you?

Internet research quickly reveals examples of individuals who are both delighted and disappointed by the type of service they have received from “free” debt management companies. Our suggestion, if you are unsure with which to proceed, is to speak to examples of both to get the information you need to make an informed choice.

In all instances you should read up on the various solutions themselves. There’s lots of great information available on this site written by the experts who work in the relevant fields. Each of them is also able to answer your questions on the forum. Finally you could email Debt Divas or call the helpline number to get specific information or assistance.

What happens after your debt solution has been selected?

This will vary according to the solution that you have chosen. You may wish to visit the case studies section of Debt Divas to read about the stories and experiences of those who have gone before you. There are case studies of relevance to each of the major debt solutions available.

When will your problem be solved?

Again this will vary according to the courses of action available to you and which you choose. A source of inspiration to many has been the success stories section of Debt Divas. Here can be found the stories and experiences of those who have not only tackled their debt problem but also succesfully advanced to a situation where their debt has either gone entirely or is succesfully under control. This situation may seem a long way away from you today but in general the earlier you start the sooner the problem will be resolved.

I do hope that this information serves as a good starting point for you. Everyone connected to Debt Divas is committed to helping people resolve their financial concerns; I hope that you’ll use the resources available here and that we can play a part in assisting you towards a better financial future.

Kelly Jago
Senior Case Handler,
Bright Oak Debt Management

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