Beware of Debt "Counselling" Companies
November 2006
Recent evidence is starting to suggest that some Debt Counselling companies are actually debt collectors in disguise.
The Game Works Like This
Lenders who are owed money, perhaps they have a client who has bad mortgage arrears sometimes will send in ‘debt counsellors’ to ‘help’ the client with their debts. But in reality the counsellors are nothing more than debt chasers.
What many of these counsellors have been doing is recommending that the debts of the company they’re secretly working for get repaid before other debts. But in reality what any good debt counsellor would likely recommend is that with the biggest debt such as a mortgage the client should look at other arrangements including switching to an interest only mortgage, reducing monthly payments, payment holidays or remortgages etc. These simple tactics can often buy a lot of time which is often all that’s needed for a debtor to get back in relatively sound financial order.
So What To Do If You've Got Problem Debts
There are two very simple rules that people in debt should be using –
- NEVER accept any debt advice, especially from a counsellor that your bank or finance company may offer to you
- Instead call the excellent, free serve National Debtline
The national Debtline has literally helped 10s of thousands of debtors over the years and you can trust them to be on your side rather than the banks.
Summary
The main problem here is to do with education. Many people who get in serious debt do not understand (and often rightly so because we’re not taught these things) that they still have many options open to them. This is why taking independent advice such as talking to the National Debtline is so critical.
Incidentally, along with the National Debtline there is another excellent free service called the Consumer Credit Counselling Service (CCCS)
See Also
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