Every person’s circumstances are different, but these steps should help most people with debt problems. We’ve added some tips and hints to help you. You may also want to read 10 Steps you can take to manage your money worries - although this is mainly for customers before they get into arrears, there are some practical solutions which you may find useful.
Don’t ignore post or messages from people you owe money to. If possible, explain your situation to someone who can give you emotional support whilst you deal with the problem.
Let your bank or building society know if you will not be able to make payments to them when they are due. Ask how they can help.
Prepare a statement of your financial position showing your income, everything you spend, how much you owe and who you owe it to. Use our Income and spending form.
Pay priority debts first such as your mortgage or rent, water, electricity, and gas bills, child support and maintenance payments, council tax, and if you are self-employed, income tax and VAT.
Cut out non essential spending.
As well as employment opportunities, make sure you claim any benefits, tax credits, tax relief or insurance payments you may be eligible for.
After paying your priority debts, review your budget to see what you can afford to pay towards your other debts.
If you agree a payment plan, your lender will expect you to honour it. Only agree payment plans that you realistically expect to pay. If your circumstances change and you cannot keep up the arrangement, contact your lender immediately.
If the previous steps do not offer a solution then you probably need expert help. Contact a free, money advice service and ask to speak to a specialist money adviser who should be able to help you.
You should only re-schedule, consolidate or transfer debts with the guidance of a specialist money adviser
Income and spending form