Aug
04

i am thinking of approaching a debt consolidation company are there eny pros and cons or is a loan a better op?

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debt consolidation company

i have heard that debt consolidation companys are a last resort could eny one please advise me on this subject

Sell and Rent Back
Categories : debt consolidation

12 Comments

1

WEll, look at it this way – they make their money somewhere (generally from YOU) Go see the CAB – get the interest on your debts stopped and have them help you draw up a payments plan.

2
Huh? - what was that noise?
October 13th, 2009 at 5:32 am

Google National Debtline or think they are also known as Pay Plan.

They run and offer services and advice FREE OF CHARGE. Worth a look? My bro used them and he is in the clear now :o)

3

If you are in the UK, you should go and speak to citizens advice, who will put you on the right track. Anything you do with poor advice is likely to put you in more trouble.

4

I would def recommend a debt management company rather than a loan.Loans can easily spiral out of control and ur just taking on more debt,vicious circle.Debt management means you can come to agreement on a monthly affordable repayment.I know I sound like one of those annoying adverts on tv,but Im with one and its helped out so much.hope this helps and good luck!

5

I would advise you to see the Citizens Advice Bureau for free advice first.

Some of these debts problems can be resolved without going down the consolidation route.

6

I know u hear all these happy stories on tv about consolidation companies but go to the citizens advice bureau or legal advice centre that gives free information on certain days of the week. A while ago a well known lady from countdown who could count, u know who i mean was advertising how good it was to go to a consolidation company and was fully recommending it – it was exposed by a watchdog programme as customers like yourself was in a worse mess. The public was trusting the advert because of the person advertising it!

7

Most of the debt consolidation business work in a bad way they do not renegotiate any thing for you until your accounts are in default.
How they work is you pay them every month and they do not pay your bills until they are months behind and they go in to a collections status. Once they are in this status they will they work out a pay off that is less then you currently owe.
What this does it is destroys any credit you have and will take you years to recover from. Its not much better then declaring bankruptcy. If you have good enough credit a loan is the best way to go.
I know it’s hard I had 40k in credit cards and it took me a while but I got them paid off. To do it I had to figure out ware ever penny I spent was going so for 2 months I kept track of every thing I spent I carried a note book with me and rote all the cash I spent down and saved every recite I then entered it in to a spread sheet so that it as easy to see ware it was going. I was amazed at how much I spent on little things like candy bars or sodas from the snack machines. After I started to do this I found I was spending less money just because I knew how much I was spending and ware.
One thing I did to free up some cash was refinance my car to get the payment down some this gave me more money to put towards my credit cards.
I also did things like change my tax with holdings. Not to have them take less from me but to have them take more I know they say this is a bad Idea but I have hard time saving money so by doing this I was able to save some cash and at the end of the year I put my refund to the smallest card balance.
I found that by controlling my small spending more closely I was able to put more cash towards paying off my credit card. I did the pay the smaller balances first thing even though they say you should pay the larger interest rate first. I just never felt like I was getting any ware that way.
I did have to give up some of my wants.
After 6 month my first card was paid off and then that gave me more motivation to pay off the 2nd one until they were all paid. Off. In all it took me almost 3 years to pay them off but it was worth it in the end.

8

Like Earl above I would recommend that before you go approaching anyone it is time to sit down and start taking control of your finances. Taking out more loans or destroying your credit rating with debt consolidation are both really last resorts, been there done it. Working out what you spend and how you can put more into paying off your debts yourself is the best and only long term option. I am currently going through paying off all the debt left to me by my ex, its not easy but it is the only practical way of doing it and teaches you valuable lessons for the future in how to handle your credit.

9

It depends on how bad your debt is, but i would not advice consolidation until you have sought proper advice. This would be moving the debt from one place to another – not dealing with the problem.

There are a few free places you can go to get advice in the uk.
Citizens advice, national debltine, CCCS or Payplan.
All are free and will not charge you for either advice or setting up a debt management plan where you pay a reduced amount to your creditors.

If you have not missed any payments and your credit file is in reasonable shape, you may be able to find ways to rteduce the amount of interest you are paying and so reduce the debt that way.

I suggest you have a look at the moneysavingexpert forum and ask for advice. This is a good source for information and tips that others have used as well as tools that allow you to work out exactly how much is owed and the best way to pay it back with least cost.

10

Debt consolidation companies are businesses out to make a profit – from YOU. You can’t afford to be paying out more. Take all the free advice – citizens advice bureau, or google for other debt management places. There are lots of websites, including dave ramsey, oprah’s debt diet, etc. There are also useful links for outside Ireland on the Irish website

Sit down and plan out your course of action. I did. I am debt free now, even the house mortgage is fully paid off. You can do it too.

11

Yes, be very careful since most debt consolidation companies use practices like non-payment for months to get credit card companies to negotiate. If you are this bad off, bankruptcy maybe the best route. I tried to use a debt consolidation company in 2001/2002 but still ended up in bankruptcy.

12

Glib is right, if you want to set a plan up go to someone who wont charge you. Dont pay fees. It is not a last resort, that is bankruptcy. You could try to get some of your debts legally cancelled before you consider a plan. Go to and they will help you.

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