Who are the Right People to Help You Deal With Debt?

The 2023 Guide to Debt Management Plans – Chapter 2

Unsure who to turn to for help managing your debt? In this article, Cashfloat will explain what kind of help you may need, and what is the best kind of provider to choose.

Cashfloat is a UK short term loan provider. We commit ourselves to running a fair and transparent service and customer awareness is one of our key concerns.

In this article, we aim to help UK consumers, who have found themselves in debt, find the right people to help them deal with the situation.

Getting Out Of Debt

Anyone who has found that their debts are spiralling out of control will be fully aware of the feeling of worry and helplessness that it can bring about. Although debt is caused by people spending money that they do not have, this spending is not always done frivolously on things they don’t really need. Maybe you have lost your job, become separated from your partner or perhaps you have suffered from a long term illness. Whatever the reasons behind your debt it is vital to tackle the problem quickly and effectively. If you need help during the process it is also vital that you find the right kind of help.

Advice you receive on how to tackle your debt should be professional and impartial. It is important that whoever you go to for help tells you what the right course of action is to take. In this chapter, we will explain who the best people are to go to if you need help dealing with your debts.

Before You Ask for Help

Before you decide whether you need outside help to deal with your debts, you should try to understand just how serious your debt problem is. If you are able to work out how much you owe and how much spare money you have, you will know whether or not you need outside help. Some people are able to stick to their repayments just by budgeting themselves more effectively. As well as giving you the chance to see if you need outside help, working out just how serious your problem is will also help when you go to ask for help.

Chapter 1 of this guide provides a more in depth explanation of how to confront debt and to decide whether you need help to deal with it or not. Here’s a brief recap of the most important points.

Don’t Get Further Into Debt

This is the first step to dealing with debt. While you are coming to terms with your debt and are deciding how to tackle it, don’t make your situation worse by borrowing more. It is useful to draw up a budget and stick to it to make sure that you do not have to borrow any more money to fund yourself.

Sometimes people end up borrowing money from a new source to pay existing debts. All this does is change who you owe money to and is always a bad way to deal with the problem. It is a much better idea to find an approach which deals with the problem head on.

Confront Your Debts and Make a Plan

The first step to take is to confront your debts. The most important thing to know is how much money you owe and whether or not you have enough in your budget to cover it.

Debts can be divided into priority debts (which will have serious consequences if you do not pay them) and non-priority debts (which will have less serious consequences if you do not pay them). If you are struggling to make payments for everything that you owe, you should make sure that you pay your priority debts first.

After you know how much you owe, you should budget yourself and see if you are able to meet both your priority debts and your non-priority debts. While non-priority debts are less important than priority debts, you still need to repay them. If you are able to do so, you may be able to clear your debts without seeking outside help.

In a situation where you are unable to clear both your priority and your non-priority debts, then you should seek help to deal with your debts. If you are at all unsure, it is best that you seek advice from a debt advisor before trying to clear your debts yourself.

Seek Help From a Debt Charity

The best option, when it comes to seeking help, is to approach a debt charity. These are non profit making organisations which simply exist to help people deal with debt. Advice and support you receive from charities is always impartial and done in your best interests. This contrasts with other help which is available, which may in fact be offered by people who are looking to profit from your situation.

Avoid Debt Consolidation Loans And Debt Management Companies

Good advice is to steer clear of debt consolidation loans and debt management companies, especially those which advertise their services heavily. . Debt management companies and companies which provide debt consolidation loans are there to make profits. Although they may promise lower payments per month, in the longer term you will end up paying out more than you now owe. There may also be other risks attached, particularly with consolidation loans, and in some cases people can end up losing their homes. Many of these companies offer services as ‘free’, when in fact they charge people for using them. Usually, the services that they provide are available for free from debt charities.

It is important that you are aware of who the best people are to go to and that you don’t allow a company who are looking to take advantage of your situation to profit from it when free help is available instead.

Which Charity Should I Go To?

There are a number of professional and helpful debt charities in the UK. For a list of the top debt charities in the UK, go to Chapter 22 of this guide.

How Do Charities Help With Debts?

Debt charities offer extensive services to help people to deal with debt for free. Help they give can range from simple basic advice about budgeting and approaching debt to supporting people the whole way through complicated procedures, such as applying for a debt relief order. In many instances they will handle the process on behalf of the person who is in debt. One such example of this is in creating debt management plans. Creating a debt management plan requires negotiation with a debtor’s creditors and they will often handle the whole negotiation and payment process, allowing the debtor freedom from worry and the need to negotiate with their creditors.

You Are Not Alone

People who are in debt often feel lonely and overwhelmed by their problems. However, help is available and debt charities are often able to ease the worry and to work with people to resolve their debt problems. If you are trying to work out how to resolve a debt problem, it is important that you seek professional and impartial advice. Debt charities are the best place to begin the journey. Some people turn to payday loans as a solution, but they are an expensive form of credit and should only be used in the short term. It is also important that you steer clear of irresponsible debt management companies who are looking to profit from your situation and do not take out a debt consolidation loan, without seeking good advice first.

One solution to debt, which many debt charities are able to arrange, is debt management plans. The rest of this guide is devoted to debt management plans. Read on to the next chapter to find out how they work.

Chapter 1:
When to Seek Help with Debt

Chapter 3:
How a Debt Management Plan Works