Getting Out of Debt

If the debt warning signs have indicated that you have debt troubles, then it's time to take some positive action and get some advice on getting out of debt. The biggest problem many people have is not taking a debt seriously enough. It may seem easier to ignore those nasty looking envelopes, than it is to open them and see the full extent of the problem. But leaving bills unopened doesn't solve the debt, and it doesn't stop us worrying about it.

To find a way out of your difficulties, you first need to see how bad the problem is. This is in some ways the most difficult step to take, as it means facing the problem head on - something you have probably been trying to avoid doing for months.

This will involve making a list of all your current debts and the other things you are spending your money on, and all your forms of income. This list will show you how big a problem you have, and how much money you have available (if any) to start repaying your debts. It will also provide a basis for discussions with the people who are chasing you for payment, as you will be able to use it to convince them that what you are offering to pay them is the absolute maximum you can afford. There is a look at this process in more detail in the Managing Your Debt section.

1 in 5 people are borrowing money just to pay household bills, and 1 in 4 is struggling to meet bills and credit repayments.

Having worked out your budget, you must look at it carefully, calmly and above all, honestly, and try to look at ways to reduce your debt. This will involve maximising your income and minimising your spending. You may even be able to find ways of writing off some of your debts altogether!

It's very important to understand the law concerning debts, to know exactly what your rights are. There are strict rules when it comes to repossessions and evictions, and you must make sure that your creditors don't use your current vulnerability to take advantage of you.

The main advice though, is DON'T PANIC! There are many places where you can obtain advice concerning your debts, some of it for free. The sooner you seek advice and put it into practice, the easier the problem will be to solve.