credit report UK from ExperianHere at Lewis Alexander Financial Management we speak to many people daily about their personal debt problems, it never ceases to amaze our compliance department the amount of bad financial advice that vulnerable consumers are receiving regarding the clearing of personal debt and the associated problems they may have.

Lewis Alexander can reveal that one of the large debt charities is in fact offering debt management plans as a more viable solution to vulnerable consumers than a Debt Relief Order to clear their debts, this is for those that qualify for both.

For a simple and short explanation, if a person owes under £15k to unsecured creditors and can afford no more than £50 per month as a total contribution, then this person, subject to having no assets totalling a worth greater than £300, can apply for a Debt Relief Order.  DRO’s or Debt Relief Orders clear debts within 12 months and any remaining debt is usually written off by the respective creditors after the 12 monthly payments have been made.  These Debt Relief Orders or DRO’s do not suit everyone but most clients will qualify for a number of solutions when an income and expenditure statement is taken, at which point the debt advisor should offer the best advice based on the consumers current and predicted future personal circumstances.

The Debt Relief Order is just like a mini IVA or Individual Voluntary Arrangement but has timescale and debt value differences. It allows people with less debt to clear the total they owe sooner than a personal debt management plan normally would allow.

As stated above, DRO’s do not suit everyone as they are a form of insolvency. However, why is such a prominent debt charity not offering people who qualify for both a Debt Management Plan and a Debt Relief Order the option? Is it because they get more fees if the client pays back via a debt management plan or arrangement?

  • Why has the “free to client” sector got the government to impose restrictions on the fee charging sector (who in the main are mostly compliant) when they cannot follow simple guidance and employ compliance themselves?

We choose the words “bent” & “crooked” carefully and hope that those that speak to a so called free debt charity also take a wider view on advice available and seek it.

  • The saying “Cheap is dear” springs to mind!
  • More DMP (Debt Management Plan) clients for a debt charity means more fees, when will the press understand this?
  • Everyone is happy to refer people to the debt charities but who is policing these charities? Anyone?

So, here is a final solution for the FCA to consider;

  • Should a personal debt be to an accountant what a legal claim is to a solicitor?

Should we make sure that any debt advice is only given out by a Chartered Accountant? Forget just a Mortgage Advisor as we have seen the damage that can be done in the past but a Chartered Accountant tends to be a different type of individual, usually more focused and committed to the detail. Yes, of course you will find “bent” & “crooked” accountants but not as often as you will find “bent” & “crooked” laymen! A solicitor still needs to underwrite a legal claim in some way regardless of who has introduced the case or work.

Could this act as “food for thought” for the FCA and OFT whilst they are conducting a handover and the industry remains plagued by non conformity!

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  • Finally, why should you be visited in your home by debt advisors?

Do they need to measure you or your carpets? Do they need to know what you look like? Identity checks can be done without face to face meetings and for the last 10 years, the only client that any member of Lewis Alexander staff has ever met is the client that stars on our national TV advert. Do not succumb to high pressure sales tactics in your home with regards to your financial situation as it is harder to say no face to face than it is to someone selling to you over a telephone!

Lewis Alexander is considering a ceremonial public burning and hand back of our Consumer Credit License as we do not see it is worth the paper it is printed on with no industry policing in place!  All press will obviously be informed and invited should we make such a final decision :)

The middle years of Queen Victoria’s reign abolished debtors prisons and now it seems to be the bad debt advisors that have re opened them in the UK. By offering bad debt advice, the vulnerable consumer seems imprisoned by a life that may be incorrectly forced upon them and this can be for a great length of time for some involved!

  • Have the OFT “washed their hands” of all “Debt Management Company” compliance monitoring and enforcement whilst waiting to fold their operation once the FCA takes over in April 2014?
  • Will it be a situation of “no case to answer Your Honour” after the OFT ceases to exist and the incorrect restrictions placed on small entities are left to go uncorrected?
  • Is this another good reason to start a small UK business that involves licensable activities? Shame on the authorities or is it a conspiracy?

The calls we enjoy the most are the calls from existing clients that have cleared their debts through Lewis Alexander and are thanking us for the help and support we have offered them!

If you are struggling with personal debt problems and require sound advice and help from a trusted debt consolidation company with over 10 years successful experience of helping others, then call our personal debt helpline today in absolute confidence.

  • Our lines are open 24 hours / 7 days – Call 0800 018 6868.
  • Your call is usually free from a UK landline but mobile call costs may vary.
  • From mobiles you can call 0161 872 3383.

May we take this opportunity to wish all our clients, twitter followers and friends, a very happy, healthy and wealthy 2014!

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