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Failed by my debt counsellors

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Around five years ago I took out an informal arrangement plan with a debt counsellor. They assured me that this was my best plan of action to suit my needs at the time. They were very confident that my debts would be cleared in 60 months.


Now that I'm nearly at the end of this term I called them the other day to see how things were going and they informed me that after the 60 months I would still be in debt by about £3500! I had a plan for £25000 and paid them £313 a month for 60 months. This means that I will have paid them £18780 and added the £3500 deficit this would mean that little impact has been made on my £25000 debt.


To be told that after 5 years I would still be in debt has made me feel sick. I cannot begin to describe my disappointment. I wish now I had taken an alternative route.


I still have around £10000 in my fund with them which I have instructed them to freeze for now and not pay to my creditors. I am considering taking my money out of there and looking for an alternative solution. They are blaming the change in economic climate and the fact that my creditors are not accepting smaller one off payments at the end of the plan to clear the debt.

Can anybody please advise?


Thanks, Bob.

Edited by scary-bob
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What is the name of the company, these companies basically prey on the ignorant and have certainly not kept their promise to make you debt-free.


The best bet now is to pull out completely, claim back any additional charges which have been added by creditors yourself and if necessary take the debt management company to court. If necessary you may need to go via a money order through the courts to get your full payment back from the DMC.


Paying the amount you did was crazy, but now you are in control, not the DMC.


The OFT are 'minded' to revoke licences to debt management companies so a complaint to them is in order.

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Hi Bob, welcome to the forums.


I'm keen to know who the firm was too, also would you be able to let me know if it was a Debt Management Plan, or an Individual Voluntary Arrangement that they set up for you?


We're keen to help, and there will be options for you, we just need to ensure this gets sorted once and for all for you!


Best wishes,



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Thanks guys for the feedback so far.

The company concerned are Compass Debt Counsellors. Since I posted one of their directors telephoned me and informed me that my case was a '1 in 1000' where creditors were not willing to accept much lower offers. He has pledged to make me 'debt free' after 60 months regardless of any deficit.

It all sounds a bit fishy to me as this is contrary to what his 'counsellors' told me yesterday. It could be because I threatened legal action against them and offered to expose them as the charlatans that I believe they are. They charged me £1500 in fees over the last 5 years too. I was also told on more than one occasion that in most instances their clients would have change at the end of their plan from their savings too.

I told him I would get back to him after I had taken independent advice.

What do I need to do now?


The plan is an informal arrangement by the way.


Thanks again,



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Thanks for that. I really appreciate it.


You have a couple of options.


a) you can move your arrangement to one of the free debt management providers, they are either

- The Consumer Credit Counselling Service

- Payplan


b) you chould choose to self-negotiate pro-rata payments directly with your creditors


c) you chould request the refund of the lump-sum and make offers of full & final settlment to your creditors


have a read of this fact-sheet




The fact that you're in rented accomodation holds you in very good stead for the latter, if you don't have a property the creditors are much more limited in their abilities to recover money from you.


No informal arrangement can guarantee a debt-free future at the 60 months point IF it involves a percentage of the debt being 'written off', it is simply an impossible promise to make. If this company have put that in writing then you'll have them banged to rights.


I appreciate the frustrations you must be feeling, we're here to help as much as we can (for the record, I work for a major money/debt charity so am pretty well versed in this sort of situation!)


best wishes,



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Thanks for that. I'm beginning to realize my iptions now.

I went to my local CAB today to discuss this issue. They have advised me to get the promise of all debts being nullified in writing, which I have requested and also to continue until the end as I only have 2 more payments to make. They suggested that if I stop making payments to the DMC now I will have broken the contract and the ball would be more in their court and the creditors may start to begin making noises again.

They said that if I can get a cast iron guarentee that I will be debt free at the end of my term with the DMC this would probably be the best plan especially as I'm 58 months into a 60 month plan, so this really is eleventh hour stuff.

I would be happy with this solution as I just want to be out of debt.

If after my half of the bargain has been met .ie I make all the agreed payments, the DMC still want to change their story etc, then I will have a case on my hands.

The CAB advised that if you are in a formal agreement the best thing to do is not break the terms of that and keep your half of the bargain.


Any thoughts?


Thanks again,



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