You can obtain free and independent advice from your local Citizens Advice Bureau. Details of your local office can be found in your telephone directiory or from the Citizens Advice Bureau website . They can help you:

• check you are getting all the benefits you may be entitled to
• help you to identify the most important debts and take action accordingly. The law gives different creditors different ways of getting their money back
• help plan your weekly and monthly budget
• draw up a financial statement by looking at your income and outgoings
• help you to decide on a plan to deal with your debts
• negotiate with the people you owe money to
• advise you on court procedures, help reply to court documents and represent at court appearances where appropriate

Type of debt and what could eventually happen:

All debts are important, but some are more pressing than others. The ultimate consequences of not dealing with a particular debt - in other words the worst that can happen - depends on what the debt is for. Some debts carry severe penalties and you should deal with these debts first. These are your priority debts. The list below shows what may eventually happen if priority debts are not dealt with.

Mortgage

Repossession of your home; eviction

Second mortgage/secured loan

Repossession of your home; eviction

Rent

Eviction from your home

Council Tax

Distraint*

deductions from wages/benefit

imprisonment

Water rates

Supply disconnected

Gas/Electricity

Supply disconnected

Unpaid Magistrates Court fine

Distraint*

deductions from wages/benefit

imprisonment

Unpaid maintenance/child support

Distraint*

deductions from wages/benefit

imprisonment

Income tax/VAT/National Insurance

Distraint*

bankruptcy

Telephone

Disconnection

Hire purchase (not normal credit)

Repossession of HP goods

Unsecured credit card debts

County Court Judgement; impaired credit rating

* Distraint is the seizure of some of your goods by bailiffs.


The worst thing you can do when you owe money is to ignore the problem, hoping it will go away. The earlier you contact your creditors, the more flexible they're likely to be in coming to an agreement with you.

Decide which debts are priority debts and which are not. The list above explains what may happen if you fail to pay priority debts. Write to your creditors, or phone, and indicate that you want to work out an arrangement which will reduce the debts.

If you make any arrangements over the phone, ask the name of the person you speak to. Write down what was said and then follow up with a letter to confirm the arrangement. Remember to quote your account reference and to keep a copy of all letters you send.


Don't make promises you can't keep

Don't be bullied into agreeing to repayment arrangements which you cannot keep. Arrange a rate of repayment that you can afford to keep up, based on the figures in your personal financial statement. Otherwise, sooner or later, you are likely to default or miss payments elsewhere and find yourself back in trouble. The aim is not just to solve the immediate problem but to get things organised so that you can afford to pay your creditors and meet your other expenditure for the foreseeable future.


Make regular payments

Many firms are computerised and these systems are programmed to send reminders and warnings automatically if payments are missed. It is better to make regular payments, however small, rather than make large occasional payments.


The law is on your side
Although the law gives creditors the power to take action to recover the money you owe them, it also makes them go through fixed procedures before the final action can legally be taken. So the law also gives you protection. For example, you cannot legally be evicted from your home without the creditor having been to court and obtained the necessary authority.


Don't be unduly intimidated

Harassing people in debt is illegal. If you are harassed by creditors seek advice immediately. You can make a complaint to the local Trading Standards Office or the Police. If the person is your landlord, you should contact the Council's Housing Service.


Other debt counselling services

National Debt Line website
Freephone helpline for debt advice - telephone 0808 808 4000 (Monday - Friday, 9am to 9pm. Saturday 9am to 1pm).
Financial Services Online Debt Test

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