CCR Magazine

Leading debt solutions provider, EuroDebt, is responding to a new report from the National Audit Office which indicates that some debt advice charities are struggling to cope with consumer demand for help.  EuroDebt believes this presents a major issue for consumers struggling with their finances. 

“The charity sector does an excellent job in supporting individuals facing financial difficulties, but the reality is that there just isn’t the resource for them to help everyone”, said Kevin Still, Director, EuroDebt.  “The National Audit Office Report suggests that at least two debt agencies are refusing to take on new clients and others have waiting lists of up to 6 weeks for a face to face appointment.

“Often the individual and families who most urgently need help are those with the higher levels of debt.  So the longer they have to wait for help, the greater the problem gets. 

“The other issue that is highlighted by the findings of the NAO report is that the model used by the charities is well proven to have less acceptance from creditors.  The voluntary organisations focus on a self-help approach to debt management.  These keep the onus with the individual on managing the relationships with their creditors and, unfortunately, this often means that they are less successful in getting interest frozen on outstanding debts or stopping debt recovery activity.

“We firmly believe that there is a place for both types of debt advice organisation. It is not uncommon for EuroDebt to refer people with very low disposable income to their local CAB. But the primary goal of EuroDebt is to act fast to help consumers take a responsible position with their creditors, especially where they have multiple credit cards and loans.  We do this by notifying the unsecured lenders that the individual has entered a Debt Management Plan.”

EuroDebt aims to help consumers take a responsible position with their creditors, especially where they have multiple credit cards and loans, by notifying the unsecured lenders that they have entered a Debt Management Plan. This involves no further borrowing and in the majority of instances lenders agree to freeze interest & charges, meaning that recovery activities stop, the debt balance will begin to reduce at a rate based upon the negotiated reduced payments to creditors and the consumer can begin to take control of their finances again. Payment proposals are presented to creditors in a consistent manner and all the figures quoted in the income and expenditure analysis will have been verified through a home visit.

A Debt Management Plan may be for a relatively short period ranging from 12 months to 3 years or a long-term plan that enables them to become debt free, potentially with some equity release for home owners in the future. The flexibility of a Debt Management Plan sometimes allows clients to resume contractual payments where creditors accept EuroDebt’s proposals of a reasonable offer for a transitional period until the client’s circumstances change.  For example; find new employment, return to work from long-term illness or maternity leave.  

EuroDebt, unlike any other fee charging Debt Management Company, is the only debt management business that makes home visits a core component of its ‘fact find’ process, ensuring a complete picture of each individual’s situation is gained.

“This is crucial” continues Still.   “At this visit, the debt advisor is able to assess not only priority expenditure, like mortgage or rent, council tax and utilities, but any arrears on these payments. Repayment arrangements to clear arrears are a priority to protect a client’s home and family. There are also instances where critical insurances have been dropped, like life insurance and home insurance, which may need to be re-prioritised.”

(Source - EuroDebt Press Release)