If you are have crippling debt problems, it would be wise if all debt relief options available to you are free, after all it’s not like you have lots of spare money. Unfortunately not all debt relief services are free. It depends on your situation and the solution you choose. Debt relief can be divided into informal and sometimes free option, debt relief involves a competent supervision, that is never free, but it is possible, and the complete bankruptcy, which can never be free. The irony is that the bankruptcy as a solution of the debt relief that is most appropriate for people with extreme financial difficulties is not free. Not only that, it forces you to pay a fee in advance.
There are many different companies and charities that offer solutions of informal debt relief. This is usually either convincing creditors to accept a longer period to repay their debt as in case of debt management plan or convincing them to accept a figure that is lower than the debt. None of these variants are legally binding on creditors and so rely on the experience of debt management consulting firm / and the combination of creditors for their success. With informal debt relief, it is always possible to find debt charities will work with you, without charge or companies that do charge a fee if they organize a successful resolution. This way, if the tax is out of the institution to creditors, then their services can be effectively free to you.
This includes Individual Voluntary Arrangements (IVA) in the United Kingdom and Chapter 13 bankruptcy in the United States. These solutions need debt relief services of a qualified person for setup and monitoring of the agreement (which generally means to repay some debt over an agreed period) and the involvement of the court to ratify it. The requirement for legal advice and involvement of the courts means that these solutions debt relief are never free. In some circumstances, they may be structured (UK), so that fees are levied on agreed monthly payments, which means no upfront fees.
I’ll say it again, it seems very unfair that a solution to debt relief that you would probably only go if you were in a financial crisis requires you to pay a fee in advance. The U.S. and the UK there are court costs to pay to declare yourself bankrupt (United States this applies to both Chapter 7 and Chapter 13 bankruptcy). The only hope of being able to declare bankruptcy if you can not pay the price of justice is to find a local charity that will pay your costs of bankruptcy. These exist, but you’ll probably need to do local searches to find them, and be prepared to justify why you need their help.
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