If you live in the UK and have debt or financial problems, you have probably noticed the flood of television advertisements from debt management or debt consolidation companies. Every new ad promises incredible payment reductions or debts written off entirely. There are dramatizations of thrilled and relieved customers and there's always a happy ending. Due to the increasing debt totals of consumers, there are now over 600 commercial (for-profit) companies in the debt industry field. (www.myvesta.org.uk)

However, you have never seen a television ad for the UK Insolvency Helpline. This is because this organization does not advertise. They note on their website that "Most debt management companies found in the UK spend thousands of pounds each week advertising their services. The end result is that these companies must recoup this investment through charging exorbitant fees." (www.insolvencyhelpline.co.uk)

What is the Insolvency Helpline?

The Insolvency Helpline is the UK's largest debt advice professional organization. Formed in 1997, it provides debt advice and support to consumers and businesses. This consultancy network is composed of professional accountants and lawyers and receives over 1 million calls per year. They state that the Helpline "exists to promote the provision of independent money advice from the UK"s professional bodies."

What services does the Insolvency Helpline provide?

They offer a wide variety of financial-oriented services to consumers and businesses through their 24-hour phone line at 0800-074-6918. They can offer debt counseling and advice via the phone or through their interactive online service. Specific services include:
- Basic debt counseling and information
- Individual Voluntary Agreements (IVAs)
- Administration Orders
- Debt management advice and support
- Mortgage and remortgage information and support
- Bankruptcy information and advice

In addition to these areas, the Insolvency Helpline provides a great deal of "self- help" information for consumers. They offer several online self help tools such a:
- A do-it-yourself online financial statement
- Budget calculator
- Debt-to-income calculator
- Sample letters to creditors
- Sample repayment offer letters
- Definitions of financial and legal terms(www.insolvencyhelpline.co.uk)

Why would someone need these services?

The rate of consumer debt in the UK has reached a record high. It is estimated that approximately 2 million people in the UK have unsecured debts in excess of ?10,000. (www.creditaction.org.uk) There are a number of causes for this problem, including job loss, health problems, divorce and poor money management. In one survey by PriceWaterhouseCooper, it was determined that of the insolvencies they studied in 2005, 75% were due to "living beyond their means". (www.myvesta.org.uk)

This is not a total surprise when you consider the ease of obtaining and using credit cards. Many credit card suppliers do not even do a credit check on borrowers before offering the cards. Interest rates on some of these credit cards can be incredibly high, also. In one instance the Vanquis Bank Card, from the Provident Financial Group, charges an unbelievable 69.5% APR, in addition to an annual fee. (www.mortgage-loan-uk.net)

Benefits of choosing the Insolvency Helpline

- It is the largest professional network providing debt and money advice
- It provides help to both individuals and businesses.
- In addition with Divorceaid, a nonprofit group, it sponsors the "Debts and divorce" campaign, a specialized program. With over 160,000 divorces per year in the UK, a survey found that 45% of divorcing or divorced people experienced financial problems, with 36% heavily in debt. (www.debt-after-divorce.com) .

- The Insolvency Helpline provides professional advice. Firms that provide advice through the helpline are all members of recognized professional associations such as the Insolvency Practitioners Association, the Association of Business Recovery Professionals or the Association of Chartered Certified Accountants.(www.insolvencyhelpline.co.uk)
- The helpline is totally independent of any financial institution or group. It is funded by donations and subscriptions of member professional firms. It does not advertise.
- The Insolvency Helpline is free of charge to consumers. All advice and counseling is provided free of charge and is generally available immediately.
- All information received and provided is kept completely confidential.

Why add to debt problems with a commercial debt company?

Due to the prevalence of debt management company ads, thousands of people sign up with them. In many cases, consumers do not realize the extent of the payments and fees these companies charge.

If you need help with debt counseling or management, it is always better to go first to a non-profit organization, such as the Insolvency Helpline or the National Debtline (www.nationaldebtline.co.uk), Consumers Credit Counseling Services (www.cccs.co.uk) or Myvesta (www.myvesta.org.uk).

Many consumers have started out with a debt consolidation or management company and ended up more in debt than when they began. The Insolvency Helpline estimates that up to 70% of their clients have had previous problems with debt consolidation companies. (www.insolvencyhelpline.co.uk) Larry Adams, senior case officer for the Insolvency Helpline says "Problems addressed at an earlier stage invariably have much simpler solutions." (www.insolvencyhelpline.co.uk)