Dealing with debt

These days there is a lot of talk about debt. In the UK we now owe more than a trillion pounds. This is an amazing figure but the fact is most of us have debts, some small, some very big.

Debts can include Council Tax arrears, Magistrates court fines, rent arrears, gas, electricity and water rates. If you have any of these, they must be cleared first.

How you deal with these debts will depend on your financial circumstances and if any legal action has been taken. The golden rules are not to ignore the situation and try to come to some arrangement to pay. Offer an amount you can afford and then make sure that you make regular payments.

You may have other debts such as catalogues, store cards, credit cards and loans. If you get into difficulties with these debts they will usually ask for details of your income and expenditure before accepting an offer of payment. Ask them if they will suspend any interest payments and charges. The creditor may decide not to collect the debt themselves and pass the account to a collection company. But they can also take legal action in the County Court. Initially, this is an order to pay but they could seek further enforcement with the bailiffs, deductions from your wages or a charge on your property (if you are a home owner).

How do I know how much to offer?

A good place to start is by writing down how much income you have coming in. Then do another list with all your household expenditure. At this point do not include your payments to your other creditors because you need to see how much money you have left each month to offer to them. Only then can you make an offer to everyone.

Get help now

Being in debt is stressful and can be frightening but there are lots of organisations out there which can help.

Citizen Advice bureau – Your local centre is listed in the phone book or visit their website www.citzenadvice.org.uk

National Debtline on 0808 808 4000 or visit their website www.nationaldebtline.co.uk

Credit Action on 0800 138 1111 or visit their website www.creditaction.org.uk

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