Birmingham City Council

How To Deal With Your Debts

The golden rules of debt advice are:

Get advice

It is important that you contact a debt advice agency. There are a number of organisations that can help you get your finances back on track. They can help you to:

  • sort out your debt problems
  • contact your creditors
  • fill in forms
  • go to court.

Check if your income can be increased

Depending on your circumstances, there are different benefits that can be claimed from the Benefits Agency or Local Authority to help to increase your income to help meet your debts.

Contact your creditors

You should always keep in contact with the people you owe money to (your creditors). Keep them informed of any change in your circumstances and to explain your financial difficulties. They may be able to arrange a more suitable payment plan.

Pay your most important debts first

You should sort out your important debts (these are called priority debts) first if you want to avoid the possibility of:

  • losing your home
  • going to prison
  • having your fuel cut off
  • having your goods being taken by bailiffs

Send your creditors a personal budget

You should send your creditors a personal budget which lists your income, spending and your debts. It should also say how much you can afford to pay each week or month.

Respond to court summons and forms

It is important to attend any court hearings so that you can explain your financial problems. You should also return any court paperwork within the allocated time period. Failure to do so may make matters worse, particularly if you are a home owner. You must take along your personal budget to any hearing to show how much you can reasonably afford to pay.

And finally, don't:

  • ignore your debt problems. They won't go away - they will only get worse
  • ignore court papers, creditors' letters or telephone calls
  • borrow more money to pay off your debts.