Where can I get help with debt?

How to stop panicking and regain control of your finances

Felicity Hannah - Virgin Money Living Mentor

by Felicity Hannah | Independent Money Mentor

Award-winning personal finance and consumer affairs journalist

When you’re struggling with debt it can affect your whole life. It can be the reason you lie awake at night worrying, the reason you snap at your loved ones and the reason you struggle to make long-term financial plans. But the good news is, it doesn’t have to be that way. The most important thing to say about debt is that it is never so bad you can’t do something about it. That’s true if you’re only just starting to feel uncomfortable with your levels of debt, but it’s also true if you feel like things are coming to a head and you’re faced with final demands and county court judgments (CCJs).

You are not the first person this has happened to and it will not ruin your life. But it is time to get help dealing with your debts.

Where to find help with debt?

There are a lot of companies and charities offering help with debt. Many of them will charge money for their services, but they actually do very little that you couldn’t do yourself.

Dealing with your debts yourself means that all the money you pay goes into what you owe and not into another company’s pocket, which is good.

But that does not mean you have to do it entirely alone. Charities and websites offer free resources, free template letters and even free debt counselling.

Bear in mind that a lot of people want debt advice and it can sometimes take time to get to speak to someone. Make sure you have everything you might need ready so you can make the most of your call, including up-to-date details about your finances including your income, outgoings and debts. And don’t forget to include store cards and overdrafts as well as loans and credit cards.

Here’s what I think are the top places to get support:

Citizens Advice

As well as providing lots of guides to your rights when you’re struggling with debt, Citizens Advice also offers free and independent debt advice either online through its Citizens Advice web chat service or in person by making an appointment at one of its bureaux.

The Debt Advice Foundation

This is a specialist debt charity that offers free and confidential advice on any aspect of debt. It also provides a really useful personal debt analyser tool that helps you understand the full extent of your debt problem and then provides a personalised plan.

It takes about 20 minutes to complete and it can be a big help in working out exactly where you stand.

StepChange Debt Charity

This website offers help with budgeting and regaining control of your debts and also provides an online Debt Remedy service to help you draw up a personalised plan.

As well as that, there is a phone number for Step Change if you would rather talk it through with a real person.

The Money Advice Service

This is a great resource for free help with debt. It has guides, explanations, and tips and tools for budgeting.

It also lists some of the commercial debt advice organisations that provide free debt counselling. The ones it lists are accredited by the Money Advice Service, so you know they are held to a high standard.

Debt top tips

Getting debt help can be key in getting everything under control. A problem shared and all that. But in the meantime here are some top tips for managing debt – and managing to get out of it.

1. Know which debts are priorities

All debt has the power to cause you problems if you don’t make repayments because if your debtors take you to court you’ll end up with County Court Judgements against your name. One of these can harm your chances of getting credit in the future, affecting your ability to get a mortgage or even a phone contract.

However, if you’re struggling with repayments then some bills are more important than others and need to be prioritised.

Priority debts and bills include those that can have an immediate effect on your life – such as rent or mortgage arrears, council tax, utility bills and any debts that are secured against your home.

2. Draw up a budget

I strongly recommend taking some time to draw up a realistic and affordable plan for getting out of debt. Everyone’s circumstances are different and you’re far more likely to get your finances under control if you know exactly what you have coming in and going out.

You could also use an online budgeting tool. This one from the Money Advice Service is pretty good.

3. Consider debt consolidation

If you have lots of little debts, such as store cards, credit cards or an overdraft, then you’re almost certainly paying a higher rate of interest than you need to. Consolidating those debts into one personal loan can save you money and make it easier to stay on top of payments.

Just make sure you don’t then run up debts on your cards and overdraft again or you’ll quickly find yourself in a worse situation than before.

4. Cancel your cards

If you’re worried you’ll simply max out your cards and overdraft again then now is the time to cancel them. It will be easier to avoid impulse spending that way. Remove the temptation.

5. Build up some emergency savings

It may seem like you can’t afford to start saving money if you’re battling debt but it’s a really good idea to try. Once you have established a repayment plan and a monthly/weekly budget then you’ve done the hardest part, and you will have a clearer idea of how much you can save in addition to your debt repayments.

Even a small amount soon builds up and it will help you avoid future debt because you’ll have money ready and won’t need to turn to credit.

There’s no point making long-term savings because you’d be better off clearing your debts. But having a rainy-day fund is a good idea for everyone, because rainy days will come around.

If you can’t get it under control…

Perhaps you’re reading this knowing that your debts have become unmanageable and that no matter how well you budget you will not be able to get on top of them.

There’s still no reason to panic. If you are in problem debt then there are still solutions, ranging from talking to your creditors to more formal action like debt management plans and IVAs (individual voluntary arrangements). There is further information available about paying off debt on the government website.

Whatever your debt situation, other people have experienced similar difficulties and you are not alone. It can happen to anyone. Don’t bury your head in the sand and do seek help – you will feel much better when you have.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.