If you're weighed down by debt, here are some tips that could help you improve your finances.
It's often said that the longer you leave a debt problem the worse it gets but, on the other hand, by facing your debts immediately, you'll be out of your debt problem sooner. And you will be out of them, because there is a solution for everyone. To get you started, here are a number of basic tips:
Pay your priority debts first
These are council tax, TV licence, fines, rent, mortgage, utilities bills, hire-purchase agreements, taxes and child maintenance.
Unsecured loans and credit cards are not priorities, so if you must default on any debt repayments then choose these. The fact is that they're at the bottom of the pile when it comes to repaying debts, which is why they're often the most aggressive about chasing you.
Be strong
You don't have to take harassment from creditors. You are well protected in law. If you're harassed, let them know that it is a criminal offence to demand repayment in a way that causes you or your family fear, distress or humiliation under Section 2 of the Protection from Harassment Act 1997. You can also report them to the Office of Fair Trading under Section 40 of the Administration of Justice Act 1970. Put this in writing.
Check your benefit entitlements
You can check out what benefits and tax credits you're entitled to using the EntitledTo website.
Tell your friends you're cutting back
Telling your friends about debts can be very hard, but it needn't be. Most people have debts, and most have more than they let on. But if admitting debts is a step too far, you can still at least say that you need to cut right back on your entertainment budget. You can use any excuse: redundancy concerns, an unexpected bill, saving for a deposit on a house (or another house) or that you want to be able to save money to take advantage of low share prices.
Stick to this, and don't succumb to pressure to go out all the time, and your friends will admire your discipline.
Get advice before consolidating debt
You might consolidate using credit cards, a loan, or your mortgage. You should take advice before consolidating your debt because there is usually a better and cheaper solution.
Contact your creditors immediately
Always call your creditors before things go wrong, and before they contact you. If you promise to call them, call them on time, even if you have to tell them that you can't afford to pay what you thought
Get professional help
You must not borrow more each month to meet existing debt payments. If you think your problem is a temporary one, you should negotiate with your creditors. The National Debtline is my favourite of several free resources that can help you, as I have heard only excellent feedback. It's free to call, and its website has one section for England and Wales, and another for Scotland.
Always attend court hearings
Remember that the law is there to protect you as well as your creditors. If you can't afford to pay more than £1 per month then no judge will make you do so. You must be able to live, and you must be able to have some money for a little fun, too. Even judges recognise this!
Also, no judge is going to order the sale of your TV or DVD player (unless they're unusually expensive).
Be totally truthful at all times
Always say what you really can afford. Don't exaggerate or understate. It is in your interests to tell the truth to your creditors and to the court.
Millions of solutions to debt
There are an unbelievably high number of solutions to dealing with debt, but all most people think of is to consolidate, which is often a poor choice for them. If you're unable to reduce your debts each month, you should seek help on the millions of ways to tackle your debts, and get a plan that is tailored specifically for you.
> Read our Get Out Of Debt guide.
> Visit our excellent Dealing with Debt discussion board.
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