1. Don't bury your head in the sand
If you can't pay someone, tell them before the deadline and try to arrange something. It might be the opposite of what you want to do but it will nearly always make it much easier to sort out.
Take the StepChange Debt Charity debt test to see if you need to seek free debt advice.
2. Get good free advice
- Usdaw and StepChange Debt Charity work together to provide debt help and managed debt solutions for anyone worried about debt. You can call the helpline free on 0800 138 1111. Find out more.
- The Citizens Advice Bureau offers confidential advice by phone and face-to-face. Visit their website to find your local CAB.
- The National Debtline provides information and resources for coping with debt. You can call the helpline on 0808 808 4000.
- Money Saving Expert provides up-to-date information on reclaiming Payment Protection Insurance (PPI). Find out more here.
- Money Helper has been set up by Government. They are independent and give free, unbiased advice to help you make the most of your money.
3. Prioritise your debts: Who is it most important to pay?
Don't pay people just because they send you the most letters or ring you up. Some payments are more important than others - simply because of what can happen if you do not make arrangements.
- Mortgage or rent - most mortgage lenders and social landlords do not want to throw you out. If you approach them in time and are honest about your problem, they will usually come to an arrangement with you that works for everyone.
- A secured loan - is like another mortgage but the law is slightly different and you may want to get advice about that. Reputable lenders will want to work with you to find a reasonable solution.
- Council Tax - contact your council tax office and try to come to an arrangement if you are in arrears.
- Utilities - gas and electricity supplies can be cut off if you cannot pay for them but:
All companies must offer a range of ways to pay so you can pay smaller amounts regularly and avoid getting into arrears.
If you do get into arrears, the companies must let you pay them off at a rate you can afford.
The rest can wait:
First sort out the above debts. Others like credit cards, money lenders, catalogues and most bank loans will have to wait their turn if you cannot pay them straight away. If you can't, write to them to explain your problem, tell them you are getting help and get advice to help you sort it all out. These people might take you to court but it is not a crime to owe money and the court will not order you to pay money you cannot afford to pay - get advice straight away if you get letters about going to court.
4. Don't run up more credit
Talk to the standard reputable sources first - your high street bank and building society and credit unions.
Do not take out more credit on cards. Keep away from high interest lenders and credit sharks. Be very careful about securing loans against your home.
5. Manage your money
You may find the following websites useful in budget planning:
Maximise your income
Make sure you have claimed all the benefits that you are entitled to.
Harassment
People who you owe are not allowed by law to harass you - or chase you in an unreasonable way - like ringing you repeatedly at unreasonable times or making threats. If you feel this is happening, get advice.
Usdaw cannot take responsibility for the content of external sites.