Debt Charities: How They Can Help You Get Out of Debt
Debt collectors don’t have any legal authority over and above the lender you originally borrowed from. Bailiffs have more powers, but there are steps you can take.
Dealing with debt can be an uphill struggle, but there are many fantastic sources of free help and advice available to you. This guide talks you through some of the debt charities and organisations that can offer support, what they do, and who can use them.
How can debt charities help?
If you’re being harassed by creditors, working with a debt charity can give you some breathing space, as debt collectors must stop contacting you for 30 days if you can show you have sought debt help.
In general, these organisations will be able to help you with a range of formal debt solutions, including the last resort, bankruptcy. They’re also really good at helping you set up a debt management plan (DMP), a more informal arrangement you can agree with creditors.
DMPs can get interest frozen on your debt so you can repay it in a sustainable way, and still have a sensible household budget. This could be a good solution for you if all your income is going to debt repayments and you’re struggling to get by day-to-day.
When researching debt charities, make sure you don’t get caught out by commercial businesses with similar names that will charge you a fee. And if you’re already in a DMP with a company that’s charging you, you can switch your plan over to a free organisation.
What are some top debt charities?
Here are a handful of the top free debt counselling charities:
StepChange can help you set up debt solutions including a DMP, debt relief order (DRO) or individual voluntary arrangement (IVA), and offers non-judgmental support for as long as needed. They also can assist with general budgeting and money advice. There’s an online tool offering tailored advice 24 hours a day. Last year it helped 635,000 people deal with their debts.
National Debtline gives free and independent advice by phone, email and web chat on all types of debt including rent arrears, credit card and catalogue debt. It has a coronavirus hub on its website, providing the latest information on the help available if you’ve got money issues resulting from the pandemic.
Citizens Advice. While not currently offering face-to-face advice, you can contact them online or by phone. Enter your town or postcode on its website to find contact details for your local branch. The website is also packed with helpful guides and template letters, and their specialist caseworkers can help you negotiate with creditors.
Christians Against Poverty. Not just for Christians, this charity offers debt coaching in your area and a free course that teaches budgeting skills. It also offers support with life skills such as making your money go further. Some of its local centres are offering only phone advice at the moment, while others are resuming socially distanced face-to-face appointments.
Who can use debt charities?
If you're in debt, it's important to face up to the problem sooner rather than later. And, generally speaking, anyone who needs information, support or advice on managing their money and dealing with debt can work with a debt charity. These groups also specialise in helping to fix serious debt problems using legal solutions.
If you choose to try to manage your debts yourself, know that many debt charities have lots of information on their websites as well as template letters to help you through the process.
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Hannah is an award-winning journalist with a background in the trade press. She writes about finance, asset management and business for Shares, Citywire, FE Trustnet, and interactive investor. Read more