Knowing that you owe lots of money and can’t keep up the payments can feel really scary. Please don’t ignore the problem: it won’t go away and the longer you leave it, the worse it will get. It’s time to ACT NOW. It is important to face the fear and focus on solving the problem, because you can get on top of things and find peace of mind again with these tips below.

Firstly don’t panic!

As anxious as you might feel, try and stay calm. There is no need to beat yourself up with guilt or to be afraid, even if threats are being made. There is free advice and non-judgmental support available on the phone and face to face support from specialist agencies (see below).

Look after yourself

Your health may be furthest from your mind, but it is important that you take care of yourself. Have a look at our article on Coping with Stress and Anxiety.

Practical things to do:

Maximise your income by checking you are claiming all the benefits you are entitled to, go to Turn2Us benefits calculator. If you’ve lost your job, or are off work because of illness, check whether your payments are covered by payment protection insurance or PPI.

Tackle your priority debts first, for example, debts that could mean losing your home or having your gas or electricity cut off. See Understanding different types of debt for information on which debts are priority.

Work out your personal budget by writing down all your monthly incomings and outgoings. Use this simple Budget Planner to help you. Keep this up-to-date. It is really useful to show it or send it to creditors when you contact them.

Get in touch with your creditors (the people you owe the money to) straight away and explain your situation. Contact all your creditors. If you arrange to pay some but not others, you may get into difficulty again.

Work out a reasonable offer to repay the money owed to each creditor. Don’t worry if it seems very small – creditors prefer you to pay a small amount regularly rather than having you make an offer you can’t afford. Many creditors will be sympathetic if you are honest and try to work something out with them but…

…don’t give up trying to reach an agreement even if creditors are being difficult. If the first person you speak to is unhelpful, ask to speak to somebody more senior who may be able to agree to what you want. Don’t be bullied into making promises you can’t keep. If they won’t agree to your offer, send it anyway on a set date each month and avoid going to court.

Always keep copies of any letters and other documents you send or receive.

Don’t borrow money to pay off your debts without thinking carefully. Get advice first. This kind of borrowing could lead you to losing your home or create other serious problems.

Get advice on the phone. You can call the National Debt Line on 0808 808 4000 or StepChange Debt Charity on 0800 138 1111. Or to get face to face support visit the Money Advice Service for a search tool where you can find local debt advice and information.

If you are being taken to court fill in the reply forms to court papers and let the court have all the facts. Always attend any court hearings and take your personal budget with you.

For further support with your spending in the future see Single Parent’s Guide – Living on a Budget.