subject: Why Bad Debt Advice Can Make Your Situation Worse [print this page] Bad debt advice can lead to an already difficult situation spiralling out of control.
The problem is that there is currently no regulation of how debt advisors work or what advice they offer in the UK. Many websites often mislead clients about what they can expect by employing their services (although the recent change to allow the Advertising Standards Authority to include online advertising in its remit should help to clean much of this up). These websites often make unrealistic claims about writing off large amounts of debt or omit any reference to fees that may be payable further down the line. Many more don't even have a consumer credit license, an OFT accreditation that is a mandatory for anyone wishing to provide debt advice.
These websites are often well branded with a free phone number and look, on the face of it, credible. However, they are often more interested in which solution will make them the most profit, rather than which is right for your situation. They will often tell you that they recommend a debt management plan, consolidation loan or an IVA after you've entered how much you owe and how much you earn in to a debt calculator. These solutions may be right for you, however, in reality, finding the most appropriate solution for your particular set of circumstances is much more complex and requires a more detailed understanding of your financial situation.
Bad debt advice is still prevalent, particularly online, so it's important that you thoroughly research the possible solutions first, so you can ask the right questions and understand the answers.
Fortunately, there are legitimate, helpful and honest companies that want to find the best solution for you depending on your circumstances:
For priority debt arrears where action can be taken against you if the debt is not paid such as a secured mortgage to avoid bad debt advice speak directly with your lender.
The Citizens advice Bureau offer a walk in service (be sure to call your local branch first for an appointment as not all have debt advisors) although be prepared to wait due to long waiting lists.
Businesses that want to avoid bad debt advice should call the government funded Business Debtline on 0800 197 6026, which specialises in assisting those with debt through limited liability companies.
Another option is organisations from the charitable sector that offer free and impartial debt advice like Debt Advice Foundation (0800 043 40 50) or National Debtline (0808 808 4000). These organisations will tailor the solution around your debt and circumstances', ensuring the least drastic option available is recommended.
Why Bad Debt Advice Can Make Your Situation Worse
By: James D Cox
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