Debt Advice Centre

Start Moving Forward With Your Debt

You need help - as quickly as possible. As difficult as it seems, take some time to try to sort your finances out and then you'll be able to relax in the knowledge that you've started to take positive action to deal with your debt.

Get On The Front Foot

• If you are reasonably confident about negotiating, write to each of your creditors (people you owe money to) and give them a copy of your monthly income and expenditure statement and ask if they will accept less than the precise amount due. It's not a good idea to offer less than 40% of your current monthly payment. Also ring your utility companies and the rates people and ask them what help they can give you. Some have charitable trusts who can give support.
• Otherwise, consider getting free professional money advice with a view to entering in to a Debt Management Scheme. Call the National Debtline on 0808 8084000 or try the Consumer Credit Counselling Service. In the private sector, contact Chiltern - these are major providers of Debt Management Schemes who we have visited and vetted. They will organise monthly payments on your behalf and help you to negotiate lower monthly payments to banks and credit card companies. These are informal arrangements that don't carry the stigma of insolvency such as an IVA (Individual Voluntary Arrangement) or bankruptcy.

Improve Your Awareness

• Draw up a breakdown of your Credit Commitments logging all of your Credit Balances, Monthly Payments and the APR you are being charged on your borrowing.
• Update it monthly, understand if you are actually going Backwards, pressure to meet payment near the end of the month can be misleading - you may be doing better than you think.
• Simplify this process by monitoring your Credit Report and track changes in your balances with our Credit Report Monitoring services FREE for 30 days and then just £7.99 per month. You can cancel at any time.
• Make a very detailed list of your monthly income and expenditures and work out the shortfall. Be realistic - include things like alcohol, cigarettes and gambling if you are likely to spend on them. There's no point in fooling anyone at this stage - you need to know where your money is going and you'll need to show this to lenders later, so if you don't add them, they will.
• Prioritise your debts, which means working out which ones must be paid, and which ones that can wait. For example, if you don't pay your mortgage or a secured debt, you risk losing your home. At the other end of the scale, mail order debt is often unenforceable unless there is a written credit agreement in place. Don't pay the company that shouts the loudest or who hassles you most.

Investigate Alternatives

• Think about approaching your family for help. They'd probably rather help you than see you being stressed out by debt.
• Go through the recommendations for those with Short Term Problems and Debt Indigestion. Whilst your credit rating may not permit some of the recommendations, some will have capacity to help your financial fortunes.

Feeling out of control? Take steps to regain control