Tuesday, 10 May 2011

Different Routes Out Of Debt

There are a number of routes a person can take in order to receive the help needed to get out of debt. In this article we will discuss these different options. Debt problems exist across the UK with millions of people in debt and thousands struggling to survive, so what is the best way to help those in need of financial help?
Since the recession began in 2008 we have continued to see an increase in the number of debt advice/management companies throughout the uk. Some of these companies will provide a free service to those in debt and some will charge a fee. Debt support can be provided by telephone based companies and some will be face to face but what is best for those who need debt help.

Citizens Advice Bureau which is a Government funded help service offering face to face help for a range of problems including debt. The charity has seen a rise in cases over the past 2-3 years. The increased demand for help from the Citizens Advice means they are dealing with a new debt enquiry every 6 minutes. Budget cuts along with demand means receiving debt advice can be difficult. A report by The Government Department for Business Innovation and Skills questioned whether a mix of telephone, internet and face to face debt help would be best due to the demand.

Telephone - A friendly option which gives people the chance to receive help quickly and have a solution which is customised to their needs. Certain organisations such as charity debt advice will be free to call and so will not be putting the client into further debt. However by speaking on the telephone it is not as personal as speaking to a person one to one which many people prefer.

Internet - This option is one that is continuing to grow and is a great solution for those who like the anonymity of the web. Advice can be provided without even speaking to anybody however this can be time consuming and difficult to understand for people in debt.

Face to face - This option gives people the chance to speak with someone who can take all the information into account and also give back a quick solution. However, this requires the person in debt to either travel to a meeting point and can therefore cost money. Alternatively the debt advisor will have to travel and to meet the individual which can again be costly.

There are three types of debt support organisations and these are broken into;

Debt Advice Company - When a person pays a company for their advice or for helping to manage their financial needs. This can be seen as a quick route however telephone based charities can offer a similar, impartial service. The debt advice company may favour a particular debt solution as it makes them more money. Also, the debt advice company may charge you for their service.

Government Funded Debt Advice - When the Government funds an organisation to offer debt advice. The best two examples of this would be, National Debt Line and Citizen's Advice Bureau. Any help or advice from these centres are free however may not be as quick an option due to having limited funding.
Creditor Funded Debt Advice - The best example of this is CCCS who are a charity funded by creditors for the work they carry out. This is also free to the person in debt.

There is many options available to people whether it is how they wish to communicate or who they wish to deal with. Speak to several debt advice companies before making a decision. Never pay for debt help and ensure the company you are dealing with has a consumer credit licence.


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