When consumers find themselves in debt and are unable to resolve the issue, they seek debt consolidation help from various sources.
Where they go for debt consolidation counseling determines what debt consolidation advice they receive and the cost of the services.
Many are already on a tight budget due to their level of debt so it is recommended that they seek free help before contacting an entity that charges a fee.
Free sources for UK debt consolidation counseling include:
- Consumer Credit Counseling Service (CCCS)- Registered charity offering management advice including consolidation. Consumers can seek help anonymously online or over the telephone. Resources include a Debt Remedy tool to help identify solutions to debt issues, including whether a debt consolidation loan is suitable. Also offers free debt management plans, bankruptcy avoidance and support, information regarding Individual Voluntary Arrangements, and a Money Management tool for debt avoidance and financial planning.
- National Debtline- independent and confidential debt management and debt consolidation advice. Services are offered over the telephone or via email. My Money Steps, an online money advice tool, provides a personalized action plan to handle debt. There are separate Web sites for England and Wales, Northern Ireland, and Scotland because each has its own debt laws. In addition to providing debt consolidation counseling, National Debtline offers relevant articles and information.
- Directgov– the official UK government Web site for citizens. The section on money matters includes an area regarding debt management. Information regarding debt, arrears, debt repayment options including debt consolidation loans, bankruptcy, and debt for young people is available.
Directgov also provides details regarding other sources for free debt consolidation credit counseling:
- Citizens Advice
- Debt Advice Foundation
- Debt Support Trust
- Christians Against Poverty
- Community Legal Advice (CLA)
- Business Debtline
- Local authorities
- Law centers
Sources Charging For Debt Consolidation Credit Counseling
If consumers have exhausted the list of free sources for debt consolidation advice and are still in trouble, they may need to pay for debt consolidation credit counseling.
Anyone who is unable to afford this service should ask a friend or family member for a temporary loan. The goal is to get help as soon as possible, even if it requires borrowing money to pay for this guidance.
Paid debt consolidation credit counseling sources:
- Debt consolidation companies – these firms offer assistance with creating a debt consolidation management plan and may help consumers locate and apply for debt consolidation loans. A debt specialist negotiates with creditors on behalf of the debtor to reduce overall payments. The debtor makes one payment to the debt management company, who then allocates the proper amount to each creditor.
- Mediation services- if consumers are unable to come to an agreement with creditors regarding debts, a mediation service representative helps both sides come to an agreeable solution. Fees start at VAT plus £50 for one hour for a dispute valued under £5,000. Both parties usually share the cost of mediation.
- Solicitors- while some work for no charge, others charge a fee. These legal professionals can be found through an online search or in the local telephone directory.
- Legal advice agencies- similar to solicitors some offer free advice, while others charge for their services. An online or telephone directory search will yield a list of these agencies.
- Financial planners- these individuals are experts regarding financial matters ranging from the need for assistance managing debt to filing for bankruptcy. They can be found in a telephone directory or through an online search.
- Loan consolidation officers- like financial planners, these individuals have experience with all degrees of financial issues. They are listed online and in a telephone directory.