When you speak to a debt advice agency you hope to get crystal clear guidance on which solution is best for your circumstances. Unfortunately, what one organisation will advise could be different to another. When you can’t get a definitive answer to your debt problem it’s often frustrating and worrying and can leave you more confused than enlightened by the advice. Debt solutions can help you find financial freedom once again, however what happens when you’re given conflicting debt advice?
When someone takes the brave step to resolve their debt by contacting a debt advice organisation they want a straightforward answer to their debt problem. If you speak to multiple advisers you may get different answers and there’s a variety of reasons, which we’ll discuss, for this.
So, how can someone make a decision about which debt solution is best for them when they are given multiple choices and not enough information?
What Is Conflicting Debt Advice?
Conflicting debt advice can happen when someone is suitable for more than one debt solution. What should happen with any regulated debt advice organisation is that a statement of affairs is gathered, which includes your monthly income, expenditure, assets, liabilities and a list of debts. From there, we can determine what you can afford to pay towards your debt each month. It’s at that stage that some debt advisory companies will give advice based solely on the facts at that point. If you’ve got multiple options but a debt adviser (or their firm) favours one solution over another, then you may not be given all the applicable options.
People will often tell us they have been advised by one debt advice organisation they are suitable for a specific debt solution and are shocked when told they are also suitable for another. At Debt Support Trust, we go through a process of “getting to know you” with the intention of understanding not just your financial situation but also your personal circumstances. This helps us understand if you’re likely to have a salary increase over the next few years or if your circumstances could change. It’s at this point we would explain which debt solutions are appropriate for you. We explain which options are available, the positives and negatives to each option and empower you with information so you’re able to make an informed choice. We often explain which debt solutions are not applicable and why we believe this.
By going through this process it helps ensure we have a full picture how you would like to resolve your debt, what’s important to you and we can make accurate recommendations based on the information.
Some people want to pay their debt back in full, others don’t want their credit rating to be affected and some people are likely to inherit money in the near future – all of which can impact on which debt solutions are applicable. Our role is to provide the information and help you decide which options are most suited for your needs. We can discuss ideas you may have to become debt free and explain any pitfalls to the plan, which you may not have considered.
It’s ultimately your decision as to which debt solution you choose, but having all the information is extremely important so you can feel confident about deciding which route is best for you.
Why Is There Conflicting Debt Advice?
Debt solutions exist to help people in financial difficulty, but the correct debt solution depends on a person’s personal and financial circumstances. There are various reasons you may receive differing debt advice.
You may be applicable for more than one debt solution. For instance, If your unsecured debt was £12,000 and you could afford £150 per month towards your debt, then you may consider – or be advised – on an IVA. This would see you, typically, debt free in 5 years and repaying £9,000 of the debt over 60 months. You may also be advised to enter a debt management plan where you repay all of the debt and this would last just over 6.5 years if interest and charges were to be frozen. It’s at this stage where we would learn more about you and your intentions before explaining the positives and negatives of all debt options.
Another reason that you could receive conflicting debt advice is that some companies may only specialise in one debt solution. Some companies have a licence to provide debt management solutions and they will advise a debt management plan is the best option. This isn’t always the right advice and consequently when you speak to another debt adviser they recommend a different solution.
It’s important that both personal and financial circumstances are taken into account when deciding which debt solution is best. It’s possible that a debt solution could affect someone’s job or housing situation – although this is rare – so it’s worth being aware of the consequences of each solution.
Find Out All Your Options
Have you had conflicting debt advice and would like to get a better understanding of which debt solution would be best for you? Perhaps you’re interested to get a second option on advice you’ve already received?
You can speak to a friendly, trained debt expert at Debt Support Trust today on 0800 085 0226 or alternatively contact us using our online form and we will be in touch at a time which best suits you.
We take the time to assess not only your financial circumstances but also your personal situation, because both are important when advising on your financial future.
From time to time we help people throughout the UK who have entered a debt solution but it hasn’t been successful in clearing the debts and resolving the money problems. This can happen for a number of different reasons including a change in circumstances, payments weren’t being made, creditors changed the plan, it wasn’t the correct debt solution or the payments weren’t affordable.
Whatever the reason, if you still owe money to your creditors then you may need debt advice to resolve any money worries.
Debt Support Trust can provide debt advice even if you’ve previously been in a debt solution which wasn’t successful. You can call our friendly advice team on 0800 085 0226 and speak to a trained money adviser for free.
Debt Solution Cancelled or Failed
One of the most consistent reasons debt solutions fail is because the solution itself wasn’t suitable. After speaking to a debt advice company you may have been advised to enter a debt solution which wasn’t appropriate for your personal and financial circumstances. This can mean your payments are too high/ low and the debt solution isn’t meeting your needs – to once again become debt free.
When you contact Debt Support Trust we’ll re-assess your circumstances, looking at your income, expenditure, assets and liabilities. We’ll then discuss with you all the available options and explain the pros and cons to each debt solution. It may be that the debt solution you entered previously was correct, however an unexpected change made the debt solution unsuccessful.
Our role at the charity is to empower you with information about all of the appropriate debt solutions and enable you to make an informed decision on which option is best for you. We aim to answer all calls quickly and provide immediate advice.
Failed Debt Management Plans
If you’ve previously entered a debt management plan which hasn’t been successful then you can enter another debt management plan, if it’s still a suitable debt solution.
Some debt management firms charge a fee from your monthly payments, typically between 10-40% of your monthly payments. At Debt Support Trust we recommend free debt management plans where 100% of the money you pay each month goes directly to your debt. Consequently you’ll be able to repay your debt faster.
If creditors refused to freeze interest and charges – which meant the debt was growing as opposed to reducing – then we could take this into account when advising on your next debt solution.
Debt management plans can help you freeze interest and charges and pay one affordable monthly payment towards the debts, until all of the money you owe is repaid. If the debt solution will last too long, we’ll often consider other debt solutions.
Failed IVA or Trust Deed
If you’ve previously entered an IVA or Trust Deed (Scotland only) which was unsuccessful then we would reassess your financial and personal circumstances and provide advice based on the information.
Typically IVAs and Trust Deeds fail because the payments haven’t been maintained, but this can happen for various reasons. If you’ve lost income and the payments become unaffordable then it could mean that your trustee discharges you from the debt solution.
After your trustee discharges you the debt will be your responsibility to manage once again and you may find creditors and debt collectors recommence action to cover the debt. If you’ve not been discharged from your IVA or Trust Deed and need advice you can call our friendly advisers for advice on 0800 085 0226.
We’ll assess your options and provide holistic advice on the suitable debt solutions for you. It may be that bankruptcy is the most appropriate option, however prior to entering any debt solution we’ll ensure you’re informed on all the options so you can decide which route is best for you.
Starting a New Debt Solution
The objective of becoming debt free hasn’t changed, however if your first attempt at a debt solution hasn’t worked, don’t be disheartened. There are various reasons a debt solution can fail and the only objective is it ensure you’re receiving the necessary support to deal with problematic debts.
Debt Support Trust advisers are on hand to support you with money worries. We can offer practical advice, in confidence and discuss options which can solve difficult debt dilemmas.
If you would like free debt advice from Debt Support Trust, please call 0800 085 0226.
At Debt Support Trust we help people with a variety of different needs and concerns, such as “how will this affect my partner”, “will my employer know” and “what will happen to my credit rating”. Many people, understandably, worry a debt solution may affect their credit rating. It’s important when entering any financial solution that you know the positives and negatives, so hopefully this article can help.
There is life after debt problems, but how will a debt solution affect your credit rating? Will you be able to apply for a mortgage once you’re debt free? And, what if you have an excellent credit rating but you need to apply for a debt solution?
If you’re unsure whether your credit rating will be impacted then it’s best to speak to a debt adviser. Debt Support Trust advisers are available Monday – Friday 8am to 7pm on 0800 085 0226.
Protecting Your Credit Rating In Debt
One common misconception is that entering a debt solution is the only way a credit rating can be negatively affected. A person’s credit rating will be impacted any time a default is added to show a missed payment or anything which breeches the original contractual arrangements.
Entering any debt solution may negatively impact on a person’s credit file, however we often find by the time we speak to someone their file will already have defaults added. If you have never missed a payment to your credit card, loans or other contractual obligations then you may have an excellent credit score. If you’re not sure then it’s best to check your credit score. You can do this for free, for life with Creditkarma.co.uk.
If you do have a default on your credit file then each default will last for 6 years from the date it was added.
Life After Debt
If you have had a “poor” credit file due to missed payments and defaults then the next step is to attempt to improve your credit rating. You can do this by acquiring your credit report and ensuring there are no errors on the report. Unfortunately if you have defaults on your credit file or late payments, you won’t be able to remove these without the consent of the lender. However, moving forward these will be removed and your credit file will slowly improve.
Borrowing manageable amounts of credit and repaying the full balance each month can also help to improve your credit worthiness. If you have debt problems then it would be best to address these as a debt solution will most likely affect your credit file further, but can also help you on the road to repairing your credit report after the solution is complete.
Credit ratings can improve over time and people who have been in debt can often apply – and be accepted – for mortgages once their debt problems have been rectified.
Advice For Your Credit Report
If you’re unsure about the best way to deal with your debt and finance problems then you can speak to one of our debt advisers on 0800 085 0226. We can provide you with advice and support on how to access your credit file and provide a detailed understanding of what each section means.
Alternately you can complete our online debt test and we will be in touch to provide further support.
The Government has pledged to make the collection of Council Tax arrears a much fairer system and work closer with debt advice organisations, such as Debt Support Trust.
As it stands, people with council tax arrears In England and Wales may find themselves with bailiffs turning up on their doorstep, however MPs want to see this changed.
While bailiffs will still be used to collect council tax arrears, Ministers want to see greater care taken when dealing with vulnerable and disabled people.
Local Government Minister Rishi Sunak MP outlined his thoughts behind the proposed changes:
“Council Tax collection is essential to running public services, like caring for those most at risk, collecting bins and keeping our transport networks running.
“The experiences of some innovative councils show that Council Tax collection rates can be improved without resorting to the unfair treatment of vulnerable people.
“That’s why I’m pushing forward work to make the Council Tax collection system fairer and more efficient – so people are treated with compassion while services get the funds they need.”
According to the Governments own website, the changes could include:
l Assessing a person’s affordability and taking this into account before escalating any action taken against them
l Having a closer link between councils and debt advice organisations
l Using fairer debt intervention methods
Stuart Carmichael, Chief Executive at Debt Support Trust, believes these changes are positive and long overdue, he said:
“Council tax arrears are one of the most common reasons people contact our debt advice charity. We often hear stories from people who are afraid they’re going to lose all of their possessions or believe they will be sent to prison. Bailiff action in recovering council tax arrears has been overbearing and excessive for some time, so we would be delighted if relief were to be granted, but it still needs to go further.
“Some people are vulnerable or simply unable to repay the full amount of arrears owed and in these circumstances we would urge bailiffs to take a person’s personal and financial positioninto consideration. In some instances, affordable and reasonable repayment proposals are being rejected and people are forced to continue to deal with threatening behaviour from debt collection agents.
“All too often we hear of arrears increasing simply due to a bailiff making numerous visits, further escalating the financial problems, when it could have been resolved earlier.”
Council Tax Arrears Increase Almost 40%
It was recently revealed that council tax arrears rose by nearly 40% across England in the last 6 years, to reach £944m during the 2017-18 financial year, up from £691m in 2012 – 2013.
The rise has led to a number of various debt advice organisations questioning the methods used by local councils to recoup money owed.
The Institute for Fiscal Studies has claimed 90% of English councils have cut their support for those of working age.
According to Caroline Siarkiewicz, director at the Money and Pensions Service, one third of people contacting debt advice organisations have council tax arrears, a figure we can confirm at Debt Support Trust.
Help For Council Tax Arrears
If you have council tax arrears and you’re unsure about your options in regards to dealing with them, speaking to a debt advice organisation, such as Debt Support Trust could help.
We will assess your financial circumstances and consider whether you’re applicable for a debt solution or if negotiating with a bailiff is your best route to dealing with the arrears.
You can call Debt Support Trust on 0800 085 0226 and speak to one of our debt advisers today. Alternatively you can complete our online debt test and we will call you back.
Bankruptcy is one of the most common debt solutions available to people struggling with their finances, however there is often confusion over how it could affect a person’s employment.
The choice to enter bankruptcy isn’t one most people take lightly and it’s important to ensure doing so isn’t going to have an unexpected impact on employment or housing
Some people may have an employment contract which states they aren’t allowed to enter bankruptcy, which is why it’s important to always seek advice.
Debt Support Trust is available Mon – Friday, 8am – 7pm and we would be more than happy to discuss your options.
Can I Enter Bankruptcy While In Employment?
The simple answer is yes, so long as they meet the criteria, however that doesn’t necessarily mean it’s the right solution for everyone.
One common misconception with bankruptcy is that debt will simply be written off, which isn’t necessarily true.
When someone applies to be declared bankrupt it becomes the job of the Official Receiver to recoup as much money for the creditors as possible. This could done via realising assets such as a property or applying an income payment order, typically for 3 years. In Scotland this could last for 4 years.
What Is An Income Payment Order
If someone is in employment and the official receiver decides they have a surplus income, based on expenditure guidelines, they will implement an income payment order.
An income payment order is a mandatory amount of money which has to be paid to the official receiver, who will then determine how the funds should be distributed.
Alternatives to Bankruptcy
When someone is in employment or has assets with significant equity, there may be additional options available to them other than just bankruptcy. This could be because of their employment contract, a surplus income or other factors which means they have to look at an alternative debt solution.
An IVA or Debt Management Plan (England, Wales & N.Ireland), Protected Trust Deed or DAS (Scotland), are alternative debt solutions which people may be applicable for. These solutions all have their positives and negatives, which is why it’s important to seek debt advice before making any final decision.
Get In Touch
If you’re unsure about whether bankruptcy is the right debt solution for you or if it will affect your employment, then we can help.
One phone call could clear up any doubts you may have and give you peace of mind about the route you’re taking to become debt free.
You can call Debt Support Trust on 0800 085 0226 or alternatively you can use our online contact form and we will call you back.
At Debt Support Trust, our advice team know all too well that debt happens for a variety of reasons and that’s what’s important is getting the correct advice and a plan in place to once again be debt free. The plan could be to negotiate with creditors, which we can help with, or a solution whereby you repay what you can reasonably afford each month. There are positives and negatives to every debt solution, but if you’re finding that debt is continuing to grow, and the situation isn’t getting easier or better, then speaking to someone can often be helpful.
Debt Support Trust’s charity money advisers are available on 0800 085 0226.
Debt Problems Are Uncontrollable
Society tells us that credit is good, but debt is bad. In truth, they are the same thing. Your credit score reflects how creditworthy you are, so when you apply for finance for a car or perhaps are applying for a mortgage, you want a good credit score so you’re accepted and can get the best rate of interest. Ultimately, to improve your credit score you need to borrow money and repay the contractual amounts on time.
Debt problems occur when contractual credit agreements are no longer manageable. The reasons debt situations can arise vary, but often it’s linked to loss of income, separation or divorce, an over-reliance on credit or an increased cost of living. For instance, a £400 per month repayment to debts could be affordable, however there’s a loss of income then it can be very difficult to make the payments. For other people it may be that the debt was manageable with interest free periods, however when these ended the monthly payments increased and became unaffordable. When a debt problem continues to grow and the amount owed isn’t getting better then the best advice is to ask for professional debt advice.
Talking about debt and money worries can help. When we speak to people struggling to manage debt, they often explain that they didn’t mean for the situation to get out of control and that if they could go back they would do things differently.
Seeking Debt Advice
Making the first phone call is always the hardest, but we aim to make it as friendly and supportive as possible. Our objective is to ensure you have every available option to consider and more importantly someone who will listen, understand and offer useful advice.
If you would like to speak to a debt adviser you can call 0800 085 0226 or send us an email (firstname.lastname@example.org) with your name and telephone number and we’ll arrange to contact you back. We’re happy to give advice over the telephone or via email.
We live in a time when it can be difficult to decipher between what is real and what is fake, whether it’s mainstream news, social media posts or debt advice adverts. We, like many other people, read the false promises being promoted on social media and want to offer some clarity.
When it comes to dealing with debt – which is a sensitive subject – reliability and accuracy are paramount. However, some adverts claim to offer solutions which seem too good to be true.
So, we’ve had a discussion and listed the top adverts we’ve seen which make bold and often unlikely claims about resolving debt problems.
Common False Advertising Claims
“Write off up between 80% – 95% of your debt” – This is an extremely misleading statement because while there are debt solutions which allow people to repay an affordable monthly repayment towards their debts, with the potential of a percentage of their debt being written off at the end of the solution, the amount isn’t fixed. An IVA ( in England, Wales & Northern Ireland) or a Protected Trust Deed (in Scotland), allow for you to pay an affordable contribution towards your debt on a monthly basis. Often you’ll only repay a percentage of your debt, however until a person has completed either debt solution there is no way to know if there will be any debt write off. The reason for this is, if during the period of time you’re in the solution and your circumstances change then it’s possible you would repay the full amount of debt plus fees for the solution. As an example, if you inherit money or won the lottery during the term of either debt solution then you would be asked to pay this money into the estate for the benefit of your creditors.
“Be Debt Free In X Number of Years” – Until a person has spoken to a debt adviser there is no way of knowing when they will be debt free. Someone may have assets which they could sell to clear their debt within a very short period of time, while others may need a solution which will last 6 years or longer. There’s never a one solution fits all answer to personal debt problems. Consequently, advice is required and a statement of affairs collated to estimate when a person will be debt free again.
“Buy Your Debt For £1” – This is consider to be more of a scam, rather than simply misleading and it is something to be very wary of. Ads will claim you can pay just £1 and they will purcahse the debt, however despite a person often paying far more than just the £1, they will still be liable for the debt.
“Consolidate Your Debts” – Some adverts claim a company will consolidate all their debts and they can make one monthly payment. Often what happens is you pay one company your monthly payment, typically in a debt management plan, and they disperse the funds on a pro-rata basis. The debts don’t get consolidated like a loan, but the company will liaise between you and the creditors. If you leave the plan each creditor will still be owed their outstanding share of the debt. If you believe a debt management plan is the correct debt solution then there are organisations offering free debt management plans so you don’t have to pay any fees from your monthly payments.
“Write off Secured Debt” – This is just simply not true. Secured debts cannot be written off or included in a debt repayment solution. If a person sells or has the secured asset (i.e a property, car etc) repossessed and there is a shortfall or balance remaining then the debt would typically become unsecured and could be suitable for a debt solution at that stage.
These are just some of the many false claims that can be found and by no means the full list.
If You’re Unsure We Can Help
If you’ve seen an advert which sounds too good to be true then why not ask us for a second opinion? Even if you’ve entered a solution we can still offer helpful advice and support. You can speak to one of our friendly team on 0800 085 0226.
By speaking to a register and regulated debt advice organisation such as Debt Support Trust or a local Citizens Advice Bureau, a full financial assessment of your circumstances will be taken before making any claims about how to deal with your debt.
If you would like the facts not the fiction to solve your debt problem, give us a call on 0800 085 0226.
Recent statistics have confirmed that the UK Inflation rate has fallen to its lowest level for 2 years. Low inflation suggests the cost of living is lower for the things we buy. Statistics show that employment has risen too.
So, what does this all mean? Well, it suggests that more people are in employment and the cost of living has become more affordable so more people may feel we have extra money in our pockets.
The Office for National Statistics revealed the drop was largely due to energy bills and fuel falling.
Mike Hardie, ONS head of inflation, said: “The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year.”
If you have debt worries, then it could be the best time to seek debt advice. You can speak to a debt advisor at Debt Support Trust on 0800 085 0226.
Unemployment Rate Falls To 2.5%
The unemployment rate fell to 4.0% – a joint 43 year low – with 32.53 million people in work across the UK.
As inflation falls and employment rises it should, at least in theory, help people struggling to afford their month to month living costs. However, for many people a small cost saving may not be enough to pay the essential bills and also contractual debt obligations. If you feel your monthly repayments to debts are too difficult and you don’t have enough money for essential living costs each month, then why not have a confidential conversation with our debt advisors?
Our debt advice team assess your income, expenditure, assets and liabilities alongside your debts. We can then make recommendations on how to improve your finances. We can recommend adjustments where your expenditure is too large or alternatively suggest a debt solution. If we recommend a debt solution we will explore all options and consider the pros and cons of each route forward.
Insolvency Rates Rising
At the end of last month it was revealed personal insolvency figures in England and Wales rose to a 7 year high of 115,229, a 16.2% rise from 2017. Insolvency debt solutions, such as bankruptcy and IVA’s both rose during 2018, however there was a much greater increase in people entering the latter.
There was a 9.8% rise in the number of people entering bankruptcy, however there was a 19.9% rise in those entering an IVA.
An IVA allows people struggling with their debts to repay an affordable contribution each month towards their debt, typically for 5 years. There are other solutions available too, such as a Protected Trust Deed or DAS in Scotland or a debt management plan. To determine the correct solutions we look at a person’s financial and personal situation, before explaining the relevant solutions in detail.
Get Debt Help
If you’re struggling with debt and find making your monthly contractual payments to your debts difficult, then you can get confidential and supportive advice from Debt Support Trust. You are under no obligation to proceed with our advice, but sometimes just sharing your concerns and worries can help.
You can speak to a friendly adviser at Debt Support Trust on 0800 085 0226 or complete our online debt test for a suggested answer to your debts.
Your credit report summarises your financial position and is used by lenders to check your rating to determine if they are willing to lend to you. However, for many people in debt, checking a credit file is a daunting experience.
It’s not uncommon to be worried about your credit score, especially if you’ve missed, or not been able to make your contractual payments towards debts. However, a credit report can be valuable for understanding just how much debt you have.
Credit Referencing Agencies
There are four main credit referencing agencies – Experian, Equifax, Crediva and TransUnion (formerly Call Credit).
The role of the credit referencing agency is to provide a lender with a review of your financial history and creditworthiness. Once the lender has your credit report they will make a decision on whether they are willing to lend to you. A credit report can be carried out for various types of lending, such as mobile phone contracts, credit cards or a car loan.
Your credit score will quickly highlight whether you have a poor, average or excellent credit rating group. The maximum number (the best) can vary depending on the credit referencing agency. For our advice team to determine the most applicable debt solutions it’s ideal to know how much unsecured debt you have, to which companies and what secured lending you have outstanding. If you’ve not been opening your creditor statements for fear of the debt, then your credit report can often give you a guide as to how much debt you currently have. This can help in determining which debt solutions you may be applicable for.
Free Credit Reports
There are resources and companies that offer free credit reports. Our favourite is Noddle from TransUnion. It’s free for life and offers you your credit rating and score, lists credit you already have, whether you’re on the electoral register, details of people you’re financially linked to and searches which have been conducted over the past two years.
Noddle is excellent because it’s free, however it only covers your credit report with TransUnion / Call Credit. Check My File offers a free 30 day trial and shows you data from all four credit referencing agencies.
We’ve tried both companies and Noddle is certainly our favourite, however, Check My File is useful if there’s a debt or two missing or you want a more comprehensive report. If you do decide to open a Check My File account and don’t wish to pay for it in the future, you will need to cancel your account. The cost is £14.99 per month if you don’t cancel.
If you would like help or advice on your credit file you can speak to Debt Support Trust on 0800 085 0226.