Golden rules of owing money

If you follow these golden rules, you won't go far wrong.

General:

• 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. This kind of borrowing could lead to you losing your home
• Make sure you tackle your priority debts first - for example, debts that could mean losing your home or having your gas or electricity cut off
• Work out your personal budget. Make sure you show it or send it to your creditors when you tell them about your difficulties
• Check you are claiming all the benefits and Tax Credits you can
• If you have lost your job, or are off work because of illness, check whether your payments are covered by payment protection insurance

Creditors:

• Contact everyone you owe money to. If you make arrangements to pay some creditors but not others, you could run into difficulties again
• Get in touch with your creditors straight away and explain your difficulties. Go and see them, phone them or write to them
• Work out a reasonable offer. 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
• 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

Court:

• Fill in the reply forms to court papers and let the court have all the facts. This information will be used to decide if you owe the money and what instalments you should pay
• Always attend 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