Debt Advice

A debt is any money owed to an individual, company or organisation for funds borrowed.

Debt can be represented by a loan note, bond, mortgage or other form stating repayment terms and, if applicable, interest payments.

These different forms all imply intent to pay back an amount owed, by a specific date, which is set out in the repayment terms.

Here are some ways that you can try and minimise your chances of getting into debt:

  • Keep track of how much money you have coming in and how much you have to put aside for bills, rent and food. Make sure you fill out a budgeting page and keep it updated each time there is a change in your income or any other change that might affect your finances.
  • You may find it helpful to set up standing orders and direct debits to pay your bills.
  • Arrange for payments to leave your account soon after your pay date.
  • If you can, try and save some money each month as a general savings plan or to cover emergencies when they arise.
    Always shop around for the cheapest gas, electricity, telephone and insurance deals. There are many to choose from. For more information see Fuel Poverty.
  • Be careful about buying goods on credit. The interest repayments can be quite high. Also, be careful about interest free credit. It may seem a good deal but if you fail to repay the full amount before the end of the free interest period, you could find yourself paying the full interest, even if you are one day late on your payment. Try to pay at least 10% of your balance every month on your credit cards.
  • Don't just run up an overdraft without talking to your bank, you will be charged for unauthorised overdrafts.
  • Be very careful about taking out any loans. Read and familiarise yourself with the terminology. Most importantly, know the difference between secured and unsecured lending. If you take out a secured loan, you are using your house as surety and may lose it if you cannot make the loan repayments.

If you are in debt, you must try not to panic. It is also important to do something about the problem, because it won't just go away.

Don't ignore calls or letters from the people you owe money to (your creditors). Contact them to explain why you are having problems. Most organisations will be more helpful if you approach them first.

The following all provide independent debt advice: