Citizens Advice

Advice

Help with Debt

Dealing with money issues can sometimes be off-putting, but if you don’t understand how things like credit or mortgages work, you could end up losing out financially or getting yourself deep in debt. Citizens Advice can give you the information you need to make the right choices, including help to deal with your debt problems, how to avoid losing your home and how to get your finances back into shape.

Check your options for getting out of debt

If you have lots of debts and are struggling to pay, there are things you can do to help you get out of debt. You might be able to talk to your creditors and arrange a way to pay them, or make a formal agreement called a ‘debt solution’. You’ll need to decide what the best solution is for your situation. It’ll depend on things like: • the type of debts you have • the total amount of debt you have • how much money you can pay towards your debts If you have some money to pay your debts, you could arrange to pay off your debts over a few years. You might be able to get a debt management plan, an administration order or an individual voluntary arrangement (IVA). If you don’t have any money to pay your debts there are still options that could help you. If you owe less than £20,000, you might be able to apply for a Debt Relief Order (DRO). If you owe more than £20,000 applying for bankruptcy might be an option. Different debt solutions can affect your life in different ways. For example, they might affect your credit rating, mortgage or savings, or restrict the work you can do. Make sure you understand how you’ll be affected before you apply for a debt solution. If you need more help understanding the different options and their risks, contact Citizens Advice Mid Lincolnshire.

Collecting information about your debts

If you owe money and you’re struggling to pay it back, there are actions you can take. Get help from your nearest Citizens Advice if you have an urgent debt problem. This could be, for example, if: • bailiffs are coming round • you’re being evicted for rent arrears • you’re being evicted for mortgage arrears • you’re being taken to court for a debt • your gas or electricity company is threatening to cut you off

Making a list of your debts

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Work out which debts to deal with first

‘Priority debts’ are debts that can cause you particularly serious problems if you don’t do anything about them. You need to work out which of your debts are priority debts and deal with them first. Make sure you’ve collected together information about all of your debts. 1. Identify and deal with your priority debts Contact Citizens Advice Mid Lincolnshire if: • you’re struggling to deal with your priority debts • you have more than 1 priority debt and you need help deciding which to deal with first If you’ve got any of these, they’re your priority debts: • Rent arrears • Mortgage arrears or secured loan arrears • Council tax arrears • Gas or electricity bills • Phone or internet bills • TV licence payments • Court fines • Overpaid tax credits • Payments for goods bought on hire purchase or conditional sale • Unpaid income tax, National Insurance or VAT • Unpaid child maintenance or child support 2. Deal with your other debts Once you’ve got your priority debts under control, you should look at all your other debts. They’re ‘non-priority debts’ because the problems they cause are less serious. Get help from Citizens Advice on how to ask your other creditors to stop chasing you while you deal with your priority debts. Your non-priority debts might include: • credit card or store card debts • catalogue debts • unsecured loans including payday loans • unpaid water bills - your supplier can’t cut off your water supply • overpayments of benefits - apart from tax credits • unpaid parking tickets - these are called Penalty Charge Notices or Parking Charge Notices • money you owe to family and friends If you don’t pay these debts, your creditors can take you to court to get you to pay - Citizens Advice can help if you don’t know what to do if you’re being taken to court. If you owe money to family and friends, it might help to tell them you have other debts. They might offer to wait until you’ve paid off your other debts before asking you to pay them back. We are here to help, for further information and advice on Debt and money contact Citizens Advice Mid Lincolnshire or visit https://www.citizensadvice.org.uk/ debt-and-money/

Ci tizens Advice Mid Lincolnshire gi ves people th e knowledge and confidence th ey need to find th eir way forward. We offer free, confiden tial advice to everyone in Boston and North Kesteven. Talk to Us

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