Guidelines to Dealing with Debt

If you realise that you are falling into debt, be sure to keep to these main principles:

If you start to have debt problems, don't ignore them. The longer you leave them, the worse they'll get.
Seek professional advice as soon as possible, from organisations like the Citizens Advice Bureaux or National Debtline- see Getting Advice for a list of helpful web sites and telephone numbers.
Prepare a financial statement to work out how much you can afford towards your debts each month.
If you can't meet debt repayments, contact your creditors straight away to explain your difficulties. Burying your head in the sand will only make matters worse.
Do not ignore phone calls or letters from creditors.
If you find yourself on the telephone to an unhelpful member of your crediting company, ask to speak to someone more senior.
Don't borrow more money to pay off existing debts without thinking hard about the consequences - particularly if the new loan is secured on your home.
Do not use the credit advantage of friends or family to help you borrow more money.
If you are facing financial problems always check that you are claiming all the benefits and tax credits you are entitled to.
Make sure you tackle your priority debts first - particularly those where non-payment could mean the loss of your home: mortgage, rent, secured personal loans. These priority debts include:

Do not inadvertently sell Hire Purchase goods - this is illegal.
If your creditors take you to Court, make sure you reply to Court Papers within the time limit.
If you reach agreement on repayment with your creditors or the Court makes a payment order, you must stick to it. If your circumstances change for the worse, go back to your creditors or the Court and explain why you can no longer pay what was agreed.
Keep copies of all letters to and from creditors and the Court.