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Debt Tips

Dealing with money issues can be off-putting, but if you don't understand or organise your money, you could end up losing out financially or get yourself deep in debt.

Debt Tips

Work out a budget

Add up all the money you have coming in every week or month.

Remember to include wages for yourself and your partner and/or any benefits you receive, plus rent from grown children and anyone else who lives with you. Then add up all the money you spend, including your mortgage/rent, council tax, utility bills, water bill, housekeeping, car tax, insurances, telephone, TV licence and any debts.

Make sure you pay your priority debts first

Don't just pay the people who are knocking on the door first or the ones who keep ringing you.

Priority debts are those which you would lose an essential service if you did not pay, for example, debts against your home, or those for which you could ultimately be imprisoned for if you didn't pay such as council tax.

Gas and electricity bills are also priorities as these will be disconnected if you don't pay.

Get in touch with your creditors

Do this straight away. Explain your difficulties. Go and see them, or phone or write to them.

Very often they will be able to help. If the first person you speak to is unhelpful, ask to speak to somebody more senior who may be able to agree to help.

Don't give up trying to reach an agreement even if creditors are difficult.

Always keep copies of any letters you send or receive so that you can prove you have tried to reach an agreement if matters come to court.

Debt don'ts

  • What not to do if you get into debt:
  • Don't feel guilty - over 2 million people are having the same problem
  • Don't borrow more money to pay off the debts you have
  • Don't ignore the problem - it won't go away
  • Don't agree to sign your home as security - you could lose your home if you do
  • Don't offer to pay more than you can afford
  • Don't let creditors harass you - they can be prosecuted
  • Don't panic - there are things you can do

Preventing money problems

Local services that can give you advice about budgeting and money management.

National websites

Self help pack

Download Preston City Council's  Debt Advice Self Help Pack (PDF) [157KB]  which can be used in getting back on track with your debts.