What should I do?

Dealing with debt is daunting. It is too easy to say ‘try to avoid unmanageable or crippling debts’ – unfortunately, life’s not always like that.

Don’t panic! As hard as it can be, stay calm and try not to be guilty or afraid, even if threats are being made. Free advice and non-judgemental support is available from the specialist agencies listed in the links section. Your health may be furthest from your mind, but take care of yourself. Have a look at the Healthy Ideas section for some tips on managing stress.

Don’t ignore the problem: it won’t go away. The longer you leave it, the worse it gets.

Maximise your income. Check you are claiming all the benefits and Tax Credits you can. If you’ve lost your job, or are off work because of illness, check whether your payments are covered by payment protection insurance.

Tackle your priority debts first – for example, debts that could mean losing your home or having your gas or electricity cut off.

Work out your personal budget. Write down all your monthly incomings and outgoings. Use our budget calculator to help you. Keep this up-to-date. Make sure you show it or send it to creditors when you contact them.

Get in touch with your creditors straight away and explain your situation. Contact all your creditors. If you arrange to pay some but not others, you may get into difficulty again.

Work out a reasonable offer to repay the money owed to each creditor. Don’t worry if it seems very small – creditors prefer you to pay a small amount regularly rather than make you an offer you can’t afford. Many creditors will be sympathetic if you are honest and try to work something out with them but…

…don’t give up trying to reach an agreement even if creditors are difficult. If the first person you speak to is unhelpful, ask to speak to somebody more senior who may be able to agree to what you want. Don’t be bullied into making promises you can’t keep. If they won’t agree to your offer, send it anyway on a set date each month and avoid going to court.

Always keep copies of any letters and other documents you send or receive.

Don’t borrow money to pay off your debts without thinking carefully. Get advice first. This kind of borrowing could lead you to losing your home or create other serious problems.

Get advice from a Citizens Advice Bureau or other advice agency if you get taken to court. Fill in the reply forms to court papers and let the court have all the facts. Always attend any court hearings and take your personal budget with you.

Who can help me? Contact your local Citizens' Advice Bureau or Debt Advice Agency or call:

National Debtline 0808 808 4000

Consumer Credit Counselling Service 0800 138 1111

Credit Action 0800 591084

See the Links section for other agencies and help lines who offer debt advice.