There is a saying, ‘knowledge is power’. When it comes to getting to grips with your situation, you need to know how much you owe, even if you are worried that the situation is worse than you think it is.
Tackling your debt
1. Get in touch with the people or companies you owe money to (known as ‘creditors’) straight away. Get the name of someone you can write to. Ask your creditors:
- how much you owe;
- what arrears (overdue or missed payments)you have;
- what penalty charges you will have to pay;
- what interest you are being charged; and
- the normal weekly or monthly payment.
2. Creditors cannot help you if you don’t explain your situation, so tell them why you are having problems paying. You should also explain your circumstances in the letter. Mention the following things if they apply to you.
- I am single (or married) with children to support (tell them how many children you have).
- I am unemployed and receive benefits (tell them the benefits you receive, such as Income Support, Universal Credit, Jobseeker’s Allowance, Incapacity Benefit, Employment and Support Allowance, and so on).
- I am off work because I am ill and I am receiving Statutory Sick Pay. (If you are also claiming benefits, tell them which ones.)
- I am employed but on a low wage.
- I am employed but have lost overtime or bonus payments.
- I have more outgoings than I can afford.
- I have lost benefits and tax credits.
3. Ask your creditors to delay taking any interest or other charges.
4. Use the example letter to help you decide what you are going to write in your letter, or say in your phone call, to your creditors.