Debt Advice Charities Explained

Many people are told when they are in debt to go and speak to a debt help charity. People are generally told debt support charities are the best option because they do not charge the client for advice. For profit debt advice providers typically charge the client for advice in order to gain a revenue stream.

The debt help charities can be split into three different categories. The difference between these charities is down to who owns them and where the funding is provided. Each has their merits and overall they are generally better than for profit organisations.

The three debt advice charity types include Government funded, Creditor funded & Solution funded.

Government funded

A Government funded debt advice charity is the Citizens Advice Bureau where volunteers and funded advisors supply advice on debt advice. You can go to your local Citizens Advice Bureau for advice and help on your debts. There are positives and negatives to the Citizens Advice Bureau option. homeless charity chelmsford

Positives

– Most independent form of debt advice
– Government funded so the most secure

Negatives

– The waiting time can be 8 weeks and longer to see a specialist
– The advice is typically provided by volunteers and this can mean the quality of advice and knowledge is not always the best in the industry homeless charity chelmsford

Creditor funded

The second type of debt advice charity is a creditor funded option. Debt charities such as the CCCS, National Debtline and Payplan are all funded by the creditors. The people who have clients in debt such as the major banks and credit lenders will donate money to the creditor funded charities to allow them to give debt advice. Again, there are positives and negatives to this type of debt charity

Positives

– The advice is typically immediate
– The charity status should mean the charity is not focussed on making a profit

Negatives

– The advice is provided by an organisation funded by your creditors
– There are some people who believe the advice is biased towards the creditors and you could be asked to repay your debt over longer than 20 years.

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