Getting Started

Before you can tackle any debt problem you need to know where you stand financially. To do this you need to get together all the information about your financial affairs.

Make a complete list of your debts.

Remember to divide your debt into separate headings - priority debts and non-priority debts You will have to make offers to pay off your priority debts before you tackle your non-priority debts.

Prepare a financial statement.

Work out your income and expenditure. You need to be honest and make sure that the amounts are realistic. Your resulting statement will show you if you have any money left over to divide up between your the people you owe. You may even be able to identify where you can make some savings.

Do not deliberately ignore any creditors letters or phone calls

You should try to contact your creditors as early as possible and explain to them why you can not pay them and why you are in debt. If you do phone, you should follow up the call with a letter, confirming what you said on the phone. Have a pen and paper with you when you make or receive a call and write down as much as you can about the call - the company the date and time - the person you talked to. Ask if there is a reference for the call - just remember "ALL CALLS ARE RECORDED" for their benefit not yours - so state only facts

What next ?

Once you have sent all the creditors a copy of your financial statement and the list of your debts. If you do not feel confident to deal with your creditors, contact a free advice agency.

If you have only a small amount of money available for your creditors after your essential spending, you may have to offer all of this to your priority creditors. You could have very little, or nothing, to offer to non-priority creditors and you should explain this to them.

Try not borrow more money to repay your debts. Think about the ways in which you might earn extra money or increase your income instead. If your income is low, you may be able to claim benefits.

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Getting Started

Priority Debts

Secondary Debts

Golden Rules

Types of Debt