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Sometimes selecting the right debt management company with a small budget might be a hectic job. Today I bring you a guide that will surely expand your options if you are looking for DMP providers at a small or free cost. 

I will be discussing 5 major debt charities that work for free and I will analyse them. 

Let’s get started!

What is Debt Management?

Debt management refers to control and manage personal finance, specifically debt, to control or eliminate it. The most common technique in debt management is drawing up a debt management plan. 

This plan makes sure that your finances are kept in place and don’t bear any kind of risk for you. The debt management plan (DMP) is usually signed up with debt management companies. This plan is usually categorized in debt help.

These companies charge a fee for their services while providing effective and efficient planning and money advice service. 

Why Do You Need a Debt Management Plan?

Debts are something that every person experiences in their lifetime. Especially in today’s economy where getting credit and loans are made so easy. Effective debt management is a skill that saves you from quite a lot of trouble and headache. 

A DMP ensures that you can properly manage your debts and your creditors. A DMP also provides an opportunity to get back on your feet if you are struggling immensely from debts or your creditors. 

Apart from that, managing debt is important to raise finance in case of emergency or need. Lenders or creditors usually check your debt records and management and then loan out money. 

This is why a DMP might be important for you to support your dream of a debt-free life. 

What to Look at while Selecting a Debt Management Company?

Many things are important while selecting debt management companies. I have listed some points below which will help you make a sound decision in the selection of a debt management company. 

Legal Structure

The first important thing to look at is the legal structure of the company. For instance start by looking at the entity of the business, whether it is a partnership or a limited company for instance. 

Secondly, make sure that it is registered in England and has a registered office as well. (Makes fraud less likely, also check out their websites). 

Lastly, while getting debt advice or a DMP, please do see that the strategy is based on legal and moral values, no fraud or shady dealings are taking place. 

Debt Management Plans (DMP)

One important thing is the DMP itself. The plan that is presented in front of you. See to it that it is a sound strategy, has feasibility, and is based on reality. 

You can get firsthand advice from industry experts on DMPs and get rid of any doubts that you have. Apart from that, the DMP must work for you as well, if you think it won’t work for you, look for another company. 

Costs

Costs might be a crucial element for many people out there. Quality services have more costly compared to mediocre service providing. However, today I am discussing debt charities that are free of costs but sometimes they also do include some indirect costs. 

Look at the costs, budget them, and stick to what you can afford to pay. The fees of a private company are quite more compared to the indirect fees that you will be paying in a debt charity. 

I would strongly suggest, don’t go over your budget as that would put high financial restraint on you. 

debt management companies

Top 5 Free Debt Management Companies in the UK

Citizens Advice Debts Management

Citizens Advice is working hard to help people struggling with debt. So far they have done a good job. They provide excellent debt advice and other services. DMP, bankruptcy, and other debt solutions are on their list as well. 

You can use citizen debt advice management to even find other companies as well. They have no fee-charging for their services and debt advice. This organization is also helping many people financially affected by coronavirus. 

You can visit their website by clicking here. 

National Debtline Debts Management

The national debt line is an organization working for years to educate people on financial and debt solutions. You can call on their free helpline to get free debt advice or you can also take their ‘debt test check’. 

The phone number is mentioned on their website and you can check it out and all other relevant information such as fee-charging, etc by clicking here. 

StepChange Debt Charity

The largest debt charity in the UK that is working day and night to provide amazing debt management plans without charging fees. Their advisors are well trained and will make sure to get you the best DMP available or recommend the best debt management companies. 

UK Stepchange debt charity was formerly known as Consumer Credit counselling but changed its name in 2012. Stepchange debt charity has helped many people get out of the debt burden.

Stepchange debt charity is located at wade house Merrion center, Leeds Ls2 8ng. You can check their website by clicking here

Shelter Debts Management

Shelter debt management the UK is not a direct service provider but more of a service broker. However, they are a registered charity. They are working day and night to provide debt and financial assistance to homeless people. 

There are no such fees for this organization, that is because they are specifically working for homeless people. 

For a DMP you might be referred to another debt charity by shelter debt management. You can check out more about them on this link. Their email address is info@shelter.org.uk

Christians Against Poverty

Christians against poverty is a totally donation funded charity, hence, they have no fee-charging or monthly payment scheme. They are providers of DMP and will ask you debt questions and arrange a meeting with your creditors to make a strategy for the DMP. 

You can contact Christians against poverty through the mail, phone, or post. You can also visit their website

These were my 5 picks for debt management companies. There are many more debt management companies that are working very well in this sector. 

(All these companies are authorised and regulated with the financial conduct authority of the UK. The websites might use cookies)

FAQs

Do these Debt Charities offer free advice and service?

These debt management companies don’t charge any fees for their services and advice. The debt counsellors also provide free debt counselling and debt management service. However, there might be some indirect costs relating to paperwork, etc. 

You might have to pay for that.

Can I get Debt Free by Using a Debt Management Plan?

Yes! If you effectively and efficiently manage your debt with a debt management company. You might be able to get over your money problems. The only thing that matters is taking a step towards a debt solution and making sure that you get out of the debt spiral. 

Debt management Plans surely help people get out of debt and support them with credit counselling as well.

Should I get Debt Advice Before Starting a Debt Management Plan?

You should! Getting debt advice might be important in some situations. If you are reaching out for a relatively new DMP provider. Second advice from outside might help you understand the debt solution that is presented by your DMP provider. 

You can seek out debt advice from any of the free charities mentioned above, apart from that you can look for advice from a financial advisor.

Does a Debt Management Plan Affect my Credit Rating?

There is no straight answer to this question. It depends on how well you manage and look after your monthly payments and creditors.

If you manage the monthly payment well and pay off your creditors on time and according to your debt plan. Then, of course, your credit score will be positively affected. 

But if you mismanage your creditors and don’t follow the debt solutions, it might adversely affect your rating.

Which will be the Right Debt Company for me?

Only you can choose which of the debt management plan providers will be the right for you. Look at your demands and the services or debt solutions that are provided by the companies, weigh them all in and see which one fits the best for your needs. 

You can analyse the companies as well, see the debt trends, and see which company has a higher success in eliminating debt ratio. 

Afterword

We all love something for free and we should appreciate the work these debt charities are doing. However, make sure that you don’t exploit them in any way. 

If you can afford a debt management company, please refer to them, so a deserving person can get debt help from these charities. 

Apart from that, I vouch for all of these registered charity organizations, they are authorised and regulated by the financial conduct authority of the UK and are doing an amazing job in this industry.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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