Debt problems

Debt can happen to anyone, and the basic procedure for dealing with debt is the same for everybody. You should deal with your debt problem quickly, and talk to your creditors. If you're worried about repossession due to mortgage or secured loan arrears, you should visit our Mortgage Debt Advice Section for more information.

If you think you might become homeless because of your debt problems you should get advice as soon as possible.

Dealing with debt?
Prioritise your debt
Maximise your income
Minimise your spending
Draw up a practical repayment plan
Housing debt problems

Dealing with debt?

While every situation is different, the method of dealing with your debt remains the same. The process is outlined briefly below. Get advice when tackling your debt. Debt is a complicated subject. An adviser can help you work out your options.

Prioritise your debt

You should put your debts into two categories:

priority debts, for example mortgage repayments, rent arrears or fuel bills.
non-priority debts, for example a bank overdraft or credit card.

Maximise your income

You should check that you are receiving your full entitlement to state benefits. If you are entitled to more benefits the extra income could help you produce a practical repayment plan. You should also ensure that you are paying the right amount of tax. Trying to maximise your income can be complicated.

Minimise your spending

The way you decide to reduce your spending depends on your personal circumstances. You can set up direct debits to reduce bills, use a budget plan for electricity, or simply reduce spending on non-essential items.

Draw up a practical repayment plan

You should pay your priority debts immediately since they are important for your standard of living. There is no single method of deciding how you pay off your priority and non-priority debts. Your repayment plan depends on your personal circumstances, your income and the type and extent of your debt.