In case you are no longer able to contribute towards your monthly payment, you might want to consider getting advice from a debt charity.
A debt charity could provide a number of alternate solutions and advice based on your financial situation.
In this article I have included all the necessary information you need to know about debt charities.
I have compiled this complete guide with FAQs about the largest debt charities in the UK.
What is the role of PayPlan in a debt management scheme?
PayPlan is one of the largest debt charity organisations in the UK.
They offer free help to their customers to help them get rid of their debt problems. Payplan is funded through contributions from other credit industries and commercial partners.
Moreover, they provide freephone debtline and debt help tools through their website.
How can StepChange help with a DMP?
In case you already have a Debt Management Plan, your monthly payments could be going to your debt management company as fees.
However, switching to a Stepchange Debt Management Plan will make all your monthly payments go towards paying your debt. This could help you pay off your debts faster.
What services can you avail through PayPlan?
You could get advice on any type of debt through PayPlan. Moreover, your financial situation and the advice given remains strictly confidential between you and the advisor.
Moreover, you will be able to track your debt solution through online processings. This could reduce the amount of calls you get from your creditors.
In case you are self employed, Payplan could help with other debt solutions including: Debt Management Plan and an Individual Voluntary Arrangement. In addition to this, your advisor could even speak to your creditor and convince them on lower monthly payments. However, your creditors need to agree to the arrangement in this case.
Furthermore, PayPlan could help you if you apply for a Debt Arrangement Scheme or for a Sequestration later.
Can providers still apply for a new application?
You might not be able to apply for a new application on your own. This is because your application must be verified by the Insolvency Service.
Is opting for StepChange a good idea?
In case you have a low credit score due to missed payments, then you might want to consider this.
StepChange could help you find the best Debt Management Plan, which could help you improve your credit score.
Moreover, you might be able to consistently make monthly payments and pay off your debts on time.
What is the difference between StepChange and PayPlan?
Where both work as debt charities, there are some differences between the two.
Payplan provides a large number of debt solutions. These include:
- Debt Management Plan (DMP)
- Individual Voluntary Arrangement (IVA)
- Debt Relief Order (DRO)
- Equity Release
- Debt Arrangement Scheme DAS)
- Sequestration or Bankruptcy
- MAP Bankruptcy
- Protected Trust Deeds
However, Stepchange provides DMPs for:
- Debt Arrangement Schemes (DAS)
- Protected Trust Deed
- Minimal Asset Protection
What are the risks involved with StepChange?
StepChange works with a tracking survey. This means they will calculate all possible financial and related outcomes for their clients. This goes on for an estimated time between 3 to 15 months, depending on the individual case. After this, you are provided with a review from the charity.
What are the similarities between StepChange and a PayPlan?
PayPlan and StepChange are both debt charities that help people deal with debt problems in the UK. They are sponsored by the Financial Industry and Banks.
They provide confidential debt advice which is for free. The advice could be taken through call or online.
Moreover, they are a 100% free service for the people residing in the UK.
Furthermore, they provide a wide range of debt solutions to help you pay off your debts easily.
How do debt charities work?
Debt charities help clients with their debt problems by providing comprehensive budgets. They establish a range of solutions and then select the one which is most convenient for the customer.
Then the solutions are provided to the client and the creditors.
Can a DMP through a debt charity affect my credit rating?
If you are in a DMP, regardless of the debt charity you choose, your credit rating will be affected.
This is mainly because you are now paying less than the minimum amount you agreed to pay from when you took your debts out.
Your DMP will stay in your credit file for approximately six years. The time begins from the initial date from when you took the loan. However, once you are debt free, you could be able to improve your credit score.
I would advise you to make your monthly payments on time so it is easier for you to recover your credit score in the future.
Frequently Asked Questions (FAQs)
How is PayPlan funded?
PayPlan is funded through donations from different credit industries. These are linked to their Debt Management Plan services.
This way they do not charge their clients, rather operate for free.
Is StepChange a charity?
StepChange is a debt charity. They are a non profit organization that provides free debt advice for individuals with debt problems.
They trade as:
- StepChange Debt Charity
- StepChange Debt Charity Scotland
- StepChange Voluntary Arrangements
- StepChange Financial Solutions
Is PayPlan free of cost?
Yes, PayPlan is 100% free of cost. This is mainly because they are funded through donations from other credit industries.
Is a StepChange free of cost?
Yes, a StepChange is free of cost. They help with providing free debt advice and solutions for your debt problems. This includes Debt Management Plans.
Debt problems could lead you to bankruptcy. However, a debt charity could help you by providing information for your debt problems.
This article provides information about two of the biggest debt charities in the UK. Read the instructions carefully to understand their difference. Moreover, you will be able to understand which debt management service will provide the best solution for you.
If you feel we have missed out on any relevant information, feel free to contact us.