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This page is :
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Dealing with debt It is often possible to resolve a debt problem if action is taken early. Deal with all debt problems as soon as possible. A person may, for example, be faced with: - gas or electricity disconnection
- court action for possession of her/his house
- bankruptcy, having received a notice called a statutory demand
- imprisonment for non-payment of a fine, maintenance, child support or, in England and Wales, council tax.
Often, a person with one debt that has become urgent will have other debts. It is important that all debts are considered at the same time because, when trying to sort out the debts, it is important that creditors know the person's full financial details so that an appropriate approach can be taken.What a creditor can do A creditor who is pressurising someone for payment may not be aware of that person's financial circumstances. If the creditor is told about the circumstances and that the person is getting money advice s/he may agree to accept reduced payments or no payments at all. Although creditors are allowed to send reminders to a person who is in debt, they are not allowed to harass someone. Dealing with a debt problem The first thing you should do is to consult an experienced adviser, for example, at a Citizens Advice Bureau. Debt problems can be complex and many issues have to be taken into account. Before seeing an adviser for debt, you should gather all the papers that relate to your finances. These should include any court papers and letters, bills and credit agreements and details of your income. If you have to wait for an appointment it may be useful for you to tell creditors that you have contacted an adviser for help. Most creditors welcome the involvement of a specialist adviser. They may be willing to hold off action to enable an agreement to be reached. Helpful organisations - Citizens Advice Bureaux: offer free advice to those with money and debt problems. If it is a very complicated case they will usually be able to refer the person to a money advice specialist. This may be a solicitor or insolvency practitioner. Their website has a facility to point you to your nearest centre: www.nacab.org.uk
- Money Advice Centres and Law Centres: help is also available from Money Advice Centres or Law Centres. The addresses and telephone numbers of local CABs, Money Advice Centres and Law Centres can be found in the telephone directory.
- Money Advice Association: can give details of the nearest adviser for people living in England and Wales, tel: 01476 594970.
- Money Advice Scotland: can give details of the nearest adviser for people living in Scotland, tel: 0141 572 0237
- National Debt Line: gives free information to people living in England and Wales. It also provides an information pack dealing with debt. The line is available on Monday and Thursday from 10am to 4pm and on Tuesday and Wednesday from 10am to 7pm, tel: 0808 808 4000.
If advice is not available If you have a debt and cannot get help from a specialist organisation, or if you would rather try to solve the problem yourself, you should: - work out your net income and outgoings to see how much is left to pay off the debts
- deal with priority debts first. These are debts which, if unpaid, have serious repercussions
- get in touch with the creditors straight away to see if they would be prepared to accept smaller payments over a longer period
- check whether you are claiming all the benefits and tax relief you may be entitled to.
Someone with a debt should seek advice before borrowing to pay off debts, for example from a Citizens Advice Bureau whose address and telephone number are in the telephone directory. This is because these loans are usually very expensive. They could also be secured against the person's home which s/he could lose if s/he is not able to make the repayments.
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