Most of this vast sum is outstanding mortgage debt. The figures for the scale of credit card and consumer debt are equally frightening. The reality is that like all debt there is usually not a problem as long as you can keep up the repayments. Difficulties can arise when circumstances change – income not keeping up with inflation for example – and people borrow more.
If you are struggling with paying off debt and you find your situation is getting worse, the first thing to do is recognise there is a problem and not ignore it. Leaving letters from lenders unopened because you don’t like what they may say is not an option. You can get free help with dealing with your debt from a number of sources – including your local Citizens Advice.
Remember, there are solutions available for dealing with debt. However if you’ve received court papers, you’re about to be evicted or you’re expecting bailiffs contact Citizens Advice immediately. If there is no emergency, there are some things you might want to do for yourself. The first thing to do is to find out how much you owe. Gather together all the information you have on your debt and make a list of creditors showing the sum owed to each one. The next step is to make a note of the priority debts on your list. These debts have the most serious consequences if they are not dealt with – like being evicted, losing your house or getting a court fine. They include mortgage payments, rent, Council Tax, income tax and TV licence fees.
Then look at your income so that you can work out how much money you can afford to offer your creditors. You can try offering a bigger share of the money you’ve got available to the creditor you owe the most. Remember to make sure you’ve still got enough money to pay your essential bills and living costs.
You might have to take into account how urgent each debt is. For example, if you think one of your creditors is about to take you to court, it could be a good idea to offer them more money. You’ll probably have to answer questions about other debts you have, so be prepared to explain why you’re offering more money to one than the other.
If you’re not confident about negotiating with creditors or they won’t accept your offer, you can get help from specialist debt advisers at your local Citizens Advice. They might be able to negotiate with your creditors on your behalf, or help you find other debt solutions. It is best to consider all the options available before choosing the right one for you. These might include a Debt Relief Order (DRO), a debt management plan, an Individual Voluntary Arrangement (IVA) or an Administration Order
So, if you have a debt problem and require help from Citizens Advice, or need information and advice on Benefits, Work, Consumer Issues, Relationships, Housing, Law and Rights, Education, Discrimination, Tax and Healthcare you can: