Debt management companies like Baines & Ernst (with a market share of about 80%) or Gregory Pennington renegotiate debts with banks and credit organisations.

• Their advertisements and customer testimonials suggest that interest payments could typically be reduced by a quarter.
   
• There is also a promise of no up front charges.

This does work for many clients. But some do complain - we welcome feedback. But there are cheaper ways of getting the same results

• Sometimes debts are just extended over a longer period. So you might end up paying more interest.
   
• Your credit record will be affected. Not all debt management companies tell you this.
   
• You will pay a commission to the typical debt manager on each repayment you make - usually 15% to 25%. This is how they will make their money from you. But we have found a better debt manager which does not charge you!
   
• An agreement made through a debt management company is not binding on lenders as an individual voluntary arrangement (IVA) would be.
   
• Not all lenders are happy to deal with a debt management company. But the OFT says lenders must accept payments from a borrower's agent.
   
• Debt management companies are not regulated. Members of the Debt task Force are to call for regulation.
   
• There is some concern that some companies cold call debtors and pressure them into signing up. The OFT guidelines make it clear that they must not do this. If this happens to you, don't panic....

When you ask to be put in touch with GFM, they will telephone you at a time convenient to you. If you wish, they will send someone to visit you at no extra cost.

They will then agree a repayment plan with the companies you owe money to, and distribute your monthly payments for you. To participate, you need to have at least £100 a month available to put towards your debts.

The only cost to you is a temporary deposit of £100. This will be added back to the first monthly payment you make through GFM.

GFM is an independent company, but the rest of its fees are paid by the lending companies themselves. (It's worth their while to do this because they are getting money back which they wouldn't have got otherwise.)

We think this is an ethical way to handle debt arrears. Please tell us of any good or bad experiences you have with GFM.

To contact GFM click here.