Worried About DEBT?
What To Do
If you are in debt, you should do the following things:
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Make sure you are getting all the money that you are entitled to.
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Work out what you spend your money on and cut back on your expenditure if possible.
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Pay your most important debts (sometimes called priority debts) FIRST.
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Contact ALL your creditors to explain your position and tell them how much you can afford to pay.
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GET ADVICE if you are unsure what to do.
The following paragraphs give you more details on how to do these things.
Your Income
Write down all the income you (and your partner) receive. Housing Options can provide you with a form to help you with this. Listed on the form are some of the benefits which are available. You don't have to be unemployed to qualify for Welfare Benefits. Always check if you are in doubt.
If you are working, check with the tax office to make sure you are not paying too much tax.
What do you spend?
Write down what you spend your money on each week. The expenditure form will help you with this. There may be other things - put them in as well. Try to be as accurate and as honest as you can.
Can You cut back?
Can you cut back on your spending? Look through the expenditure list you have made. Is there anything you can cut back on? Be realistic. Only cut out those things you can easily afford to do without.
Remember, these will be long-term cutbacks and not things you can start to spend on again in a few months' time.
Your Debts
Make a list of everybody you owe money to. This includes gas, electricity, rent, Council tax, water rates, mortgages, credit cards, store cards, loans, overdrafts, HP, fines, catalogues etc.
Write down the account numbers, the amount owing, any arrears, the weekly or monthly payments and the interest rate.
Which are Priority?
Priority debts are those you should pay first. If you do not pay priority debts, the consequences are more serious than for other types of debt.
Some examples of Priority Debts are:
- Mortgage or Rent
- Council Tax
- Water Rates
- Gas and Electricity
- Fines
How Much can You Afford?
Please make an appointment to see you Housing Options Officer. Bring the completed income and expenditure form with you. The Advisor will assist you to calculate the amount you have to pay towards your debts
Pay Priority Debts First
You have already listed which are your priority debts. If there are arrears on any of these, contact the creditors and arrange to pay an amount you can comfortably afford.
Your Creditors
Once you have made arrangements for your priority debts, contact all your other creditors, even if it is only to tell them that you can't afford to pay. Send a copy of your income and expenditure to all your creditors, details of arrangements you have made with other creditors and details of them amount you are offering them (if anything). If interest is being charged on your debts you could also ask them to freeze this until the situation improves.
Get Advice
If you are unsure about any of the above or you would like to discuss your problems please see a Housing Options Officer.