Golden rules for dealing with debt

National Debtline provides anyone with debt difficulties in England, Wales and Scotland with free, confidential and independent advice. In this first article in a series from the charity, it outlines some golden rules for coping with debt.

If you follow these golden rules, you won’t go far wrong.
  • Don’t ignore the problem. It won’t go away and the longer you leave it, the worse it gets.

  • Don’t borrow money to pay off your debts without thinking carefully. Get advice first. If you own your home, this kind of borrowing could lead to you losing your home.

  • If you have lost your job, or are off work because of illness, check whether your payments are covered by payment protection insurance. Check your credit agreement.

  • Check you are claiming all the benefits and tax credits you can.

  • Use this sheet to help work out your personal budget. Make sure you show it or send it to your creditors when you tell them about your difficulties.

  • Make sure you show it or send it to your creditors when you tell them about your difficulties.

  • Get in touch with your creditors straight away and explain your difficulties. Go and see them, or phone or write to them.

  • Make sure you tackle your priority debts first – for example, debts which could mean losing your home or having your gas or electricity cut off.

  • Work out a reasonable offer to repay the money you owe. Don’t worry if it appears very small if that is really all you can afford. Creditors prefer you to pay a small amount regularly than make an offer you can’t afford.

  • Contact everyone you owe money to. If you make arrangements to pay some creditors but not others, you could run into difficulties again.

  • If the first person you speak to is unhelpful, ask to speak to somebody more senior who may be able to agree to what you want.

  • Don’t give up trying to reach an agreement even if creditors are difficult.

  • Fill in the reply forms to court papers and let the court have all the facts. The court will use this information to decide if you owe the money and what instalments you should pay.

  • Always go to court hearings. Take a copy of your personal budget with you. Don’t think that going to the county court makes you a criminal; it’s not that kind of court. They will not send you to prison and there is no jury.

  • Always keep copies of any letters or court forms you send or receive.

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