Work out the extent of the problem
Work out your financial situation before agreeing to make extra payments. You may end up making unrealistic offers if you don't know the full situation. Get in touch with your creditors to let them know you are dealing with your debt problem.
Get in touch with your creditors
Write to your creditors to let them know that you are dealing with your debt problems. Make a copy of your creditor's replies. Use the 'Creditors letters' .
Emergency debts
You must deal with some debts as emergencies. You may have an emergency debt if:
- your lender is going to repossess your home because you haven't paid your mortgage
- your landlord has asked you to leave because of rent arrears
- a creditor is threatening legal action
- you have to go to court because of a debt
- your phone or gas is about to be disconnected
Contact your creditors if you think you have an emergency debt. Explain that you are getting advice about clearing your debts. Ask your creditors to wait until you have sent them proposals for clearing your debts. Use the 'Emergency debt checklist' when you are talking to your creditors.
Your creditor may ask you to make a payment immediately. Try to ensure that you only make your normal payments. Follow up your telephone call with a letter. Using letter templates can help you communicate effectively with your creditors.
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Work out your finances
It is important to know exactly how much money you have. It allows you to see:
- how much money you have to repay your debt
- what payments you can realistically afford
The amount of money you have left after subtracting your essential payments is known as your 'disposable income'.
When working out your finances stick to either monthly or weekly figures. Use a converter tool to get accurate figures. Include you and your partner's income and benefits. Don't include overtime or overestimate your income. You might make offers that you can't afford.
How much is coming in
Use the Income form to work out your regular income. Remember to stick to either weekly or monthly totals.
How much are you spending
Be realistic about your spending, don't underestimate how much you spend. Include special events such as Christmas or birthdays in your weekly shopping bill. Don't forget about cigarettes if you smoke.
Use the Expenditure form to work out how much you are spending.
How much do you owe each creditor
Use the 'Creditor checklist' to work out how much you owe all your creditors. This will help you keep track of the progress you are making with each creditor.
Send all your creditors a letter. Explain that you are getting advice about clearing your debts. Ask your creditors to hold any action until you have sent them proposals for clearing your debts.
Get advice if you are dealing with debt. An adviser can explain your options and help you contact your creditors.
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Emergency Debt Checklist (
