What does debt help mean?

24 November 2008

A lot of ‘debt’ websites (including this one) talk about ‘debt help’, but what does it really mean? Debt help isn’t a specific kind of debt solution. It means what it says: help with your debts.

By definition, that’s something that varies from one borrower to the next. Everyone’s debts are different, and two people with debt problems can need very different kinds of debt help to resolve them.

Debt advice
For some people, ‘debt help’ can simply mean a bit of advice: budgeting tips, hints on negotiating with creditors, help learning to prioritise… Sometimes, if someone’s debts are only threatening to get out of control (rather than already out of control), a few small adjustments might be enough to get their finances back in order.

Debt solutions
Other people, though, may be better off with a professional debt solution, such as a debt consolidation loan, an IVA (Individual Voluntary Arrangement) or a debt management plan (although these aren’t the only options). The right debt solution can help people in debt reduce the amount they’re spending on payments to their unsecured debts every month.

Even so, debt consolidation loans, debt management plans and IVAs are very different debt solutions. Each has its own (very different) pros and cons, and no-one should commit themselves before they’ve spoken to a professional debt adviser who understands how all the different debt solutions work, and can help them decide if one is right for them.

Debt help – sooner rather than later
If you’re worried about your debts, it’s never too late to take action, but it’s always best to seek debt help sooner, rather than later. In general, the earlier you get some debt help, the more options you’ll have – and the easier it should be to get your finances back on track.

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Gregory Pennington are founder members of DEMSA (Debt Managers Standards Association).

DEMSA are the first trade body within the finance industry to successfully secure approval for its code of practice under the OFT Consumer Codes Approval Scheme (CCAS).