A BBC investigation finds companies making money from entering people into the wrong debt solutions.
Some debt management companies are receiving payments for passing clients on to insolvency practitioners,It also found some companies were making money from entering people into the wrong debt solutions and pushing them further into financial hardship.
She contacted one which was making big promises to help with her situation and soon entered into a popular debt solution that is an alternative to bankruptcy - a Protected Trust Deed. The bulk of her money has gone to the Trust Deed company in fees - including paying for admin, stationery and postage - rather than paying off her debt.A Protected Trust Deed is an insolvency solution in Scotland. It is similar to an Involuntary Arrangement in England and Wales.
It is regarded by finance experts as a good solution for those with a reasonable disposable income who can afford to pay a regular amount. Mr Mulvey said the financial incentive of signing someone up to a Trust Deed means people are often being directed towards this solution when there are other debt solutions which may be more appropriate or cost them less money.
"There's so many people out there who could have helped this woman. She's basically been left with £6,000 worth of debt, and paid two grand for the privilege." Cassandra is now in limbo and does not know whether her debt will be wiped or she will be back to square one.BBC Scotland's Disclosure programme spoke to several companies operating in Scotland.Some companies told her that a Protected Trust Deed would not be appropriate for someone in that situation and pointed her towards debt charities offering free advice who could help.
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