Debt Management Companies Reviews & In-depth Info 2022
For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.
If you’re in debt and want to find a solution, you need to hear more about debt management companies and what the best can offer…
Keep reading to learn how to uncover the best debt management companies in the UK right now!
What Is a Debt Management Company?
A debt management company is a commercial business offering debt solutions to people in debt. They will usually listen to your situation and recommend a solution based on your debt and current income. This part is free but any solution you do sign up to will need to be paid for, often monthly.
These companies work with an in-house professional who is certified to create and monitor various debt solutions. The name of this person is an insolvency practitioner. Sometimes an insolvency practitioner can offer these services from other businesses, such as financial advisory or accountancy businesses.
There are hundreds of debt management companies in the UK to choose from, which is why it is important to research the one you are thinking of using. Or use debt management company reviews online for guidance.
What to Look for in a Debt Management Company
When looking at debt management companies online, there is lots you should look out for. Here are some of the most important:
- That they are certified and FCA approved
- They have good reviews (use external websites like Trustpilot and not just their own website reviews and testimonials.
- They offer a number of different solutions. Variation ensures you get the best fitting solution for your situation.
- Their website is transparent and offers contact information. The worst debt management companies will usually only communicate via website forms to begin with and usually only have a single-page website with no valuable information or FAQs page.
You should also scroll to the very bottom of their homepage to the small print. This is where you can usually see if the debt management company is providing the debt solutions themselves or outsourcing to a company with an insolvency practitioner.
Some appear to be debt management companies when they are really just lead generation websites that pass your details to real debt management companies in return for a fee. Though there is nothing wrong with this, the customer will get the same information, some people prefer to go directly to the debt management company, rather than through the middle man.
Do I Have to Use a Debt Management Company?
Many formal debt solutions have to be arranged and monitored by an insolvency practitioner, which means they cannot be agreed with your creditors yourself. For example, IVAs or Bankruptcy require an insolvency practitioner’s input.
Some informal solutions can be agreed by yourself and you won’t be forced to use a debt management company. For example, a Debt Management Plan (DMP) is a monthly repayment agreement that is not legally binding and you can try to negotiate by calling your creditor.
Sometimes however, a debt management company will get a better deal for you
Can I Use Debt Charities Instead?
Debt charities in the UK can offer free debt advice which is invaluable and supportive. It is better than the advice offered by debt management companies because it is not commercially motivated.
However, debt charities tend not to be able to offer the same selection of debt solutions as debt management companies. Step Change UK is one of the best to speak with.
Read Debt Management Companies Reviews on MoneyNerd!
Our team at Money Nerd has been reviewing lots of UK debt management companies and uploading our reviews to Debt Management blog.
If you want to know more about the debt management company you are thinking of using, including reviews from real past debtors, take a look at our reviews page. You can find what we thought of them before committing!