Dealing with Debt

If you are having difficulties in dealing with debt problems you should always seek specialist advice.  Any information you give will be treated confidentially, and remember, they're trying to help you so listen carefully to what they have to suggest, even if at first you think it looks 'hard going'.

Before seeing an adviser about debt, gather together all your financial papers. These should include any court papers and letters, bills and credit agreements, and details of your income and expenditure and that of your spouse or partner.  If you can put all your in-comings and outgoings on one easy to read spreadsheet, all the better, but if you simply can't sort out where you stand with all the letters and statements you have, don't worry.  An adviser will help you get it all in order so they can see exactly what the problem is and how you can sort it out.

If you can't see someone straight away and have to wait for an appointment, don't worry, it may actually help to tell creditors that you have contacted an adviser for help. Most creditors welcome the involvement of a specialist adviser. They may be willing to hold off action to enable an agreement to be reached.

Here are some tips that should help you get started:

• Get free advice
• Don't panic or ignore the problem: unopened bills won't go away.
• You can't ignore your debts. Better to pay a small amount than nothing at all - those you owe money to may be prepared to accept low repayments.
• If struggling with store or credit cards stop using them.
• Work out a realistic budget that covers all your income and spending. Check whether there are any benefits or tax credits you are entitled to that you are not getting.
• Decide which debts take priority - like mortgage or rent - and which cost you most through penalties or higher interest rates.
• Only agree to pay off debts at a rate that you can keep up - don't offer more than you can afford.
• Contact those who you owe money to as soon as possible. Let them know that you are having problems. Many companies will be helpful if you talk to them.
• If organisations won't accept your repayment offers, seek advice.
• If you get a threatening letter get advice from your local Citizens Advice Bureau or trading standards service.
• If a debt collector calls at your home you don't have to let them in. If you want time to get advice arrange a later appointment. If a debt collector or lender harasses you contact your local Citizens Advice Bureau or trading standards service.
• Check if a loan will be secured on your home. If it is and you do not keep up repayments you could lose your home. If you do not understand the terms of a loan get advice.
• If you're thinking of taking out a new loan to pay off debts make sure you find out the total cost of the loan, not just the monthly repayments.
• Think very carefully before borrowing more to pay off your debts. Get impartial advice and don't rush into signing anything you don't understand.
• If you are thinking of using a fee-charging debt management company, then make sure you understand exactly what you are signing up to - check what fees you will be paying to a debt management company and how long it will take you to pay off your debts.
• Keep copies of all letters you send and get about your debts.