has anybody heard of these companies that claim to be able to wipe out the balance on credit cards . are they a con or are they legit. I have a lot of debt and it would be brilliant to be able to write it all off but they want about £200 pounds per card to do it. has any one used them?
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. Debt Relief Orders (From 6 April 2009)
What is a debt relief order (DRO)?
DROs provide debt relief, subject to some restrictions. They are suitable for people who do not own their own home, have little surplus income and assets and less than £15,000 of debt. An order lasts for 12 months. In that time creditors named on the order cannot take any action to recover their money without permission from the court. At the end of the period, if your circumstances have not changed you will be freed from the debts that were included in your order. DROs do not involve the courts. They are run by The Insolvency Service in partnership with skilled debt advisers, called approved intermediaries, who will help you apply to The Insolvency Service for a DRO.
Is a DRO likely to be suitable for me?
To apply for a DRO, you must meet certain conditions:
You must be unable to pay your debts.
You must owe less than £15,000.
You can own a car to the value of £1000 but the total value of other assets must not exceed £300.
After taking away tax, national insurance contributions and normal household expenses, your disposable income must be no more than £50 a month.
You must be domiciled (living) in England or Wales, or at some time in the last 3 years have been living or carrying on business in England or Wales.
You must not have been subject to another DRO within the last 6 years.
You must not be involved in another formal insolvency procedure at the time you apply.
Credit Card Debt Elimination is a program where the debt management company guides the debtors in eliminating their unsecured debts through a monthly payment of a fixed amount. Debt management is no way a loan program. In this process a debt management company makes repeated negotiations with the credit card issuing companies for lowering the monthly fees, late and over-the-limit charges of the debtor. Thus after the enrollment for such a program, the accounts of the highly indebted debtors are regarded as “current” as per some of the credit reporting companies.
But there are legitimate as well as scam company’s in the market. So you need to be very careful in choosing the Company, or else you could land into more troubles.
The previous answers are all wrong. The CAB do not do it and they are not scams. There are a number of companies who use solicitors to legally challenge the credit card agreements, in court if necessary, to get the balances wiped out. The credit card companies settle out of court to avoid the floodgates opening on claims. I used http://www.bdebtfree.info to find the cheapest company, £200/£250 rings a bell for the first card then the others are cheaper. If for any reason they cannot challenge the agreement they will refund your money. Find out for yourself if this would suit you. I was delighted with the outcome for me.
OF COURSE they want you to pay them ….
it’s the basis of all good scams .. you pay, they run away
There are many ‘debt reduction’ service / consultants / advisers etc etc etc out there scamming desperate people in financial difficulties who don’t know any better (if they did, they wouldn’t be in difficulties) …..
Those who ask for money up front are always crooks .. however there are also a lot of ‘marginal’ crooks (they get their fees by adding it to your debts)
There are a few legitimate companies who will deliver a real service (finding these on the Internet is like looking for a needle in a haystack – go to your local Citizens Advise in UK)
Essentially it all comes down to 2 things :-
1) ‘Loan Consolidation’ .. you take out a loan to pay off the cards, often a charge against your house (so if you default, they sieze the house) at what might seem to be an ‘attractive’ rate of interest BUT you will be paying it back for the next 30 years …
This almost never works because people who run up massive debts on their credits cards simply do it all over again ..
2) Bankruptcy .. or one step before (such as an IVA in UK) .. your Credit Score is trashed and all you Cards are frozen .. the Card companies ‘agree’ to freeze the Interest charges and you pay back at some fixed rate (if you miss a payment they make you bankrupt).
Sometimes this works, but often people who can’t get a Credit Card end up taking out ‘pay-day loans’ (at 300% interest) instead …
I would speak to Citizens Advice who can provide you with the best options.
Most of them are scams. I would not trust one that even my local government said was legit.