Free Debt Management

Is there such a thing as free debt management? Of course there isn't. Everything has a cost, indirectly and directly.

However, if you speak the charity CCCS or the not-for-profit company PayPlan they will tell you that they do offer a free debt management plan service. But is it truly free? Of course it isn't. The direct cost may be free but as these two organisations are nearly all funded by the financial institutions there is an indirect cost. So why do the financial institutions offer this support?

As we all know the banks aren't in business for charitable reasons. They are in it to make money. If something doesn't make money then, as any struggling businessman will testify, they'll cut your financial support. So I think we can all assume that the above two companies are making money for their backers!

But let's for a minute assume that these organisations do not offer advice which benefits their supporters and stop and ask the question - should I use their free debt management service? Well, I would say no. Why? Because if you take control of your own debts you feel empowered and therefore more compelled in sorting out your own debt problems. Allowing somebody else only encourages you to keep your head in the sand about your personal finance issues.

It's worth bearing in mind that CCCS and Payplan don't offer a special service which you cannot do yourself. They cannot promise to freeze interest rates, nor can they promise to suspend charges to your account. So what do they do? They send out standard letters to your creditors, with the information which you supply them via an Income and Expenditure form with a pro rata offer of your surplus income. They then report back to you once they receive word back from your creditors and take payments from you which are then disbursed to your creditors. That's it!

Doing your own debt management plan is not only free but puts you in control of your finances. If you follow Debtwatchdog's DIY debt management guide then you'll be able to empower yourself into a debt free future. Whether or not you buy into my argument about these organisations being puppets of the financial institutions you'll certainly be helping yourself if you try your own debt management plan.