Step 4: Pay off your debts
Taking control when your debts are problematic
If you're starting to feel like your debts are becoming out of control, or you're struggling to make payments on them and your other bills, you need to take action now.
- Work out how big the problem is - make a list of all the money you owe and priorities your debts and bills. If you’re behind on any payments, clearing the arrears should be one of your priorities. You can do this online through CCCS Debt Remedy which will also provide you with the best advice on dealing with your financial difficulties. It only takes about 15 minutes, is free of charge and you don’t need to provide your name.
- Talk to the people you owe money to - they may be able to help you and most will be understanding of your situation. However if you don't and then miss payments and fall into arrears you'll incur more charges and this will have an impact on your credit rating.
- Be honest - with yourself, those you owe money to and family or friends who may be able to help you. Don't agree to a repayment schedule you can't keep to as this will be more costly and damaging in the long run.
- If you have multiple cards, take them out of your purse or wallet, only carry one for emergencies. Or think about cutting them up to remove temptation altogether.
- Think about ways you can boost your income. Can you do overtime at work? Could you take on a second job? Are you eligible for any benefits? Could you take in a lodger? All of these could help top up your income and give you some breathing space.
- Make the most of free help and advice - there are lots of organisations who can provide practical support and advice - see the external links section on the right for more information.
And finally - don't panic. You've taken the biggest step in admitting your debts are a problem. Now you're in the right frame of mind to take control. Be sure to review your budget and your debts every few months, and re-prioritise if necessary.