If you're in debt

who is best to help you?

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Avoid a financial date with

disaster

Debt management firms may appear as simple, helpful options for people experiencing financial stress, but often they make things worse through high feesill-suited advice or questionable business practices. Their cheap tricks end up being quite expensive. Let’s really get to know them.

Money Management
Who are they?

“Money Management,” “Personal Budgeting Services”, or “Debt Payment Services” offer to manage your income, bills and debts, while providing you with an allowance for daily expenses. Some also claim to provide other services, such as negotiating future repayment arrangements with your creditors. They then charge you periodic maintenance or management fees, usually in addition to an up-front establishment fee.

Why should you be worried
  • If your problem is that you don’t have enough income, paying someone to manage your money will make your situation worse!
  • Money Managers hold and manage your money without any regulatory oversight.
  • Money Managers may be more likely to keep your money in your account earning interest (and therefore earn money for themselves) for as long as possible instead of paying your debts when they are due.
  • Customers complain that they are left without enough money to live on.
  • Money Managers may take no responsibility for dealing with your creditors if there is not enough money in the account to pay all of your bills.
  • If things go bad, you may have limited options to resolve any dispute with them.
  • Money Managers do not have to be licensed – just about anyone can set up as a Money Manager and charge for it.
Need a better solution?

You can set up scheduled payments in your own bank account. Some bank accounts also allow you to set up sub-accounts for particular expenses so you can plan for major expenses without extra fees.

If you are having financial difficulties, contact a free and independent financial counsellor on 1800 007 007. They can help you come up with a plan without making a bigger hole in your wallet.

View our comprehensive Money Management Fact Sheet
Credit Repair
Who are they?

Credit Repairers claim that they will be able to “fix” or “clean” a bad credit report and “improve” a poor credit score. However their ability to do any of this is limited and if your credit report is inaccurate you can get it fixed for free.

Why should you be worried
  • Credit Repairers don’t guarantee they can remove your bad listings or improve your ability to get credit – you could pay a lot of money for absolutely no benefit.
  • Even if they do manage to remove a negative listing, this doesn’t necessarily mean that you will be able to get a loan. There could be any number of other reasons you can’t obtain credit.
  • Credit Repairers frequently make promises and guarantees without properly considering your specific circumstances.
  • They often charge you “success” fees for the removal of a default listing regardless of whether it makes any difference to your ability to get credit.
  • Some don’t even act on your behalf – all they do is charge you to tell you how you can try to remove a listing and you do the work yourself anyway.
  • Credit Repairers do not have to be licensed – just about anyone can set up as a Credit Repairer and charge for it.
Need a better solution?

You are entitled to 1 free copy per year and if you are declined for credit because of your credit file.

If a listing is wrong or disputable the process is relatively easy to do yourself for free. Contact your creditor first. If you believe a listing on your credit report is wrong an external dispute resolution scheme can consider your dispute for free. You may not always win but you will not have wasted any money.

If you need advice about running a credit report dispute you can call 1800 007 007.

View our comprehensive Credit Repair Fact Sheet
Debt Negotiatior
Who are they?

Debt Negotiation is a negotiation between you (the debtor) and your creditor(s) to settle a debt on terms beneficial to both parties. Debt Negotiators present debt negotiation as something they do as experienced “professionals”. But in many cases they are far from it.

Why should you be worried
  • Debt Negotiators do not have to be licensed – just about anyone can set up as a Debt Negotiator and charge for it.
  • Some Debt Negotiators suggest you stop paying your creditors and pay them instead – only negotiating with your creditors once you have paid their fee.
  • Some negotiate with your creditors and charge a fee based on how much they “saved you” – this can add up to thousands.
  • Debt Negotiators may ask you to get your hands on a lump sum and using this amount to offer in negotiations. They may not have the skills, experience or professional knowledge to use this money to your best advantage.
  • Some Debt Negotiators may advise you to stop paying your debts to create “leverage” with your creditors, but this could lead to default listings and legal proceedings against you.
  • They may also misrepresent your circumstances to your creditors by, for e.g., exaggerating your health problems in order to negotiate on “compassionate grounds” This may affect your ongoing relationship with your creditors.
Need a better solution?

If you are having financial difficulties, contact a free and independent financial counsellor on 1800 007 007. They can assist you to negotiate realistic, sustainable arrangements without adding to your debt with expensive fees.

View our comprehensive Debt Negotiation Fact Sheet
Debt Agreement
Who are they?

Debt Agreements are an alternative to bankruptcy for people who are unable to pay their debts. Debt Agreement brokers usually offer to provide a “free consultation,” during which they may suggest that entering into a debt agreement is your best or only option. This is often not the case. A Debt Agreement is an insolvency option and has serious consequences.

Why should you be worried
  • Debt Agreements may look good but you are entering a form of insolvency which will affect your ability to get credit and may have other serious consequences.
  • Debt Agreement brokers benefit from fees generated by encouraging people to enter Debt Agreements – their advice might be driven by what is best for them rather than what is best for you.
  • Debt Agreement brokers do not explain that you may be better off making financial hardship arrangements directly with your creditors.
  • Some people who enter a Debt Agreement find that a few years later they are still struggling financially and end up filing for bankruptcy anyway. Many Debt Agreements last longer than bankruptcy.
  • A Debt Agreement broker is likely to structure payments to make it seem like the arrangement is affordable. But in signing up and incurring an ongoing cost, you are effectively adding another creditor to your list.
  • Debt Agreement brokers do not have to be licensed – just about anyone can advise you to take up a Debt Agreement and charge for it.
Need a better solution?

If you are having financial difficulties, contact a free and independent financial counsellor on 1800 007 007.

View our comprehensive Debt Agreement Fact Sheet

Money Management!

Credit Repair!

Debt Negotiator!

Debt Agreement!

Money Management
Who are they?

“Money Management,” “Personal Budgeting Services”, or “Debt Payment Services” offer to manage your income, bills and debts, while providing you with an allowance for daily expenses. Some also claim to provide other services, such as negotiating future repayment arrangements with your creditors. They then charge you periodic maintenance or management fees, usually in addition to an up-front establishment fee.

Why should you be worried
  • If your problem is that you don’t have enough income, paying someone to manage your money will make your situation worse!
  • Money Managers hold and manage your money without any regulatory oversight.
  • Money Managers may be more likely to keep your money in your account earning interest (and therefore earn money for themselves) for as long as possible instead of paying your debts when they are due.
  • Customers complain that they are left without enough money to live on.
  • Money Managers may take no responsibility for dealing with your creditors if there is not enough money in the account to pay all of your bills.
  • If things go bad, you may have limited options to resolve any dispute with them.
  • Money Managers do not have to be licensed – just about anyone can set up as a Money Manager and charge for it.
Need a better solution?

You can set up scheduled payments in your own bank account. Some bank accounts also allow you to set up sub-accounts for particular expenses so you can plan for major expenses without extra fees.

If you are having financial difficulties, contact a free and independent financial counsellor on 1800 007 007. They can help you come up with a plan without making a bigger hole in your wallet.

View our comprehensive Money Management Fact Sheet Back
Credit Repair
Who are they?

Credit Repairers claim that they will be able to “fix” or “clean” a bad credit report and “improve” a poor credit score. However their ability to do any of this is limited and if your credit report is inaccurate you can get it fixed for free.

Why should you be worried
  • Credit Repairers don’t guarantee they can remove your bad listings or improve your ability to get credit – you could pay a lot of money for absolutely no benefit.
  • Even if they do manage to remove a negative listing, this doesn’t necessarily mean that you will be able to get a loan. There could be any number of other reasons you can’t obtain credit.
  • Credit Repairers frequently make promises and guarantees without properly considering your specific circumstances.
  • They often charge you “success” fees for the removal of a default listing regardless of whether it makes any difference to your ability to get credit.
  • Some don’t even act on your behalf – all they do is charge you to tell you how you can try to remove a listing and you do the work yourself anyway.
  • Credit Repairers do not have to be licensed – just about anyone can set up as a Credit Repairer and charge for it.
Need a better solution?

You are entitled to 1 free copy per year and if you are declined for credit because of your credit file.

If a listing is wrong or disputable the process is relatively easy to do yourself for free. Contact your creditor first. If you believe a listing on your credit report is wrong an external dispute resolution scheme can consider your dispute for free. You may not always win but you will not have wasted any money.

If you need advice about running a credit report dispute you can call 1800 007 007.

View our comprehensive Credit Repair Fact Sheet Back
Debt Negotiatior
Who are they?

Debt Negotiation is a negotiation between you (the debtor) and your creditor(s) to settle a debt on terms beneficial to both parties. Debt Negotiators present debt negotiation as something they do as experienced “professionals”. But in many cases they are far from it.

Why should you be worried
  • Debt Negotiators do not have to be licensed – just about anyone can set up as a Debt Negotiator and charge for it.
  • Some Debt Negotiators suggest you stop paying your creditors and pay them instead – only negotiating with your creditors once you have paid their fee.
  • Some negotiate with your creditors and charge a fee based on how much they “saved you” – this can add up to thousands.
  • Debt Negotiators may ask you to get your hands on a lump sum and using this amount to offer in negotiations. They may not have the skills, experience or professional knowledge to use this money to your best advantage.
  • Some Debt Negotiators may advise you to stop paying your debts to create “leverage” with your creditors, but this could lead to default listings and legal proceedings against you.
  • They may also misrepresent your circumstances to your creditors by, for e.g., exaggerating your health problems in order to negotiate on “compassionate grounds” This may affect your ongoing relationship with your creditors.
Need a better solution?

If you are having financial difficulties, contact a free and independent financial counsellor on 1800 007 007. They can assist you to negotiate realistic, sustainable arrangements without adding to your debt with expensive fees.

View our comprehensive Debt Negotiation Fact Sheet Back
Debt Agreement
Who are they?

Debt Agreements are an alternative to bankruptcy for people who are unable to pay their debts. Debt Agreement brokers usually offer to provide a “free consultation,” during which they may suggest that entering into a debt agreement is your best or only option. This is often not the case. A Debt Agreement is an insolvency option and has serious consequences.

Why should you be worried
  • Debt Agreements may look good but you are entering a form of insolvency which will affect your ability to get credit and may have other serious consequences.
  • Debt Agreement brokers benefit from fees generated by encouraging people to enter Debt Agreements – their advice might be driven by what is best for them rather than what is best for you.
  • Debt Agreement brokers do not explain that you may be better off making financial hardship arrangements directly with your creditors.
  • Some people who enter a Debt Agreement find that a few years later they are still struggling financially and end up filing for bankruptcy anyway. Many Debt Agreements last longer than bankruptcy.
  • A Debt Agreement broker is likely to structure payments to make it seem like the arrangement is affordable. But in signing up and incurring an ongoing cost, you are effectively adding another creditor to your list.
  • Debt Agreement brokers do not have to be licensed – just about anyone can advise you to take up a Debt Agreement and charge for it.
Need a better solution?

If you are having financial difficulties, contact a free and independent financial counsellor on 1800 007 007.

View our comprehensive Debt Agreement Fact Sheet Back

Need help finding that

special someone?

There are free and trustworthy alternatives to debt management firms that you can contact for advice and assistance right now.

Find a financial counsellor

In NSW? Use our easy search tool to find a financial counsellor near you.

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or
Find a financial counsellor

Call the National Debt Helpline for free help managing your money and debt.

1800 007 007

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