Why Debt Consolidation Doesn’t Work

In my opinion debt management companies don’t always work, although I am basing this on my own personal experience. At the beginning of last year I found myself in quite a bit of debt, totalling around 2000 pound to be exact.

The debt was the usual sort of debt that a lot of people find themselves in, credit cards, bank overdraft and over spending at Christmas, the bills were coming through the door nearly everyday and instead of sorting them out, my first reaction was to hide them in the drawer, (stupid I know) By hiding them I could bury my head in the sand , which obviously is not the answer.

After a while the threatening letters , threatening I was going to court, arrived, this is when I finally realised I had to do something and fast, I sat and counted all my debts , which now totalled more than 2000 pound due to the interest being added, by this stage I was really stressed out.

The next action was to ring A debt Management Company to try to arrange a solution to my problem, they agreed to consolidate my debt and I would have to pay them 100 pound per month, with the first instalment as their fees. Once the first 100 pound was paid they had said that they would write to my creditors and arrange a monthly payment plan with them.

I was relieved and could finally see light at the end of a very dark tunnel, however two weeks later I rang my creditors to see if they had heard anything from Debt Line and they had not heard a thing , after another week still Debt Line had not contacted any of my creditors.

Payment was due a week later, so I did not pay the money as I had seen no effort being made, Debt line phoned to see why payments had been missed and I explained and also asked for a statement of the payment plans to be sent to me, but this was not possible. I informed them that I wanted nothing more to do with them.

Two weeks later I received a letter from one of my creditors, thanking me for the 12 pound payment , Debt Line had went ahead and paid this after I stated I wanted nothing more to do with them.

After the phone call I decided to sit down and write to all my creditors and explain the situation I was in and I arranged a payment plan with them all, they were all very helpful and agreed to a monthly payment plan.

Debt Line were going to pay my creditors 12 pound each per month, so therefore out of the 100 pound I paid to them they would pay a total of 36 pound and the rest of the money would be theirs, I now use the 100 pound to pay off my debts .

I am not sure if all Debt Management Companies work like this. If anyone is going to use one of these companies PLEASE BE CAREFUL !