Ways to Resolve Your Problems

There are various methods of paying your bills; you should look at them all and decide which is easiest and best for you. For example, if you are paid weekly, you would be best advised to pay your bills weekly to avoid hefty payments every month.

Reduced Payments

If you have available income after paying your food, fuel and housing costs, our advisers can contact your creditors with a financial statement offering affordable repayments. Creditors usually agree to freeze interest if they see regular payments being made.

Consolidation Loan (Secured/Unsecured)

If you have available income and you contact us before your debts get out of hand, it may be possible to apply to a bank or finance company to borrow enough money to repay all of your debts. The advantage is that you will then only have one creditor to repay. Sometimes banks ask that this type of loan be secured on your property or it can work out more expensive,so it is always a good idea to take advice before making this your preferred option.

Trust Deeds

If you feel that you need a more formal arrangement or if your debts are likely to take several years to clear, you may wish to consider signing a Trust Deed. However, this is not usually advisable if you own your home and can only be considered if you have available income or assets that can be sold (insurance policies, valuables). You should be aware that if enough creditors object to the Trust Deed, you could end up being declared bankrupt. You are usually discharged from the Trust Deed after three years and the payments you have made during that time are paid on a pro-rata basis to your creditors in full and final settlement of the debts. Creditors cannot take action against you during or after the three years.

Bankruptcy

This should usually be considered as a last resort not least because it has the most damaging effect on your credit rating (it can be affected for up to 15 years). It is not usually advisable if you own your home and can only be an option if you owe more than £1500 and one of your creditors has served a Charge for Payment against you (or in the case of Council Tax for example, a poinding has taken place). You may be required to pay money to your Trustee for the period of your bankruptcy (usually three years). Assets are usually sold and all monies held by the Trustee (insurance policies, valuables, cars etc).

Different Ways To Pay Your Creditors

Fuel

As the bills come in
Weekly/monthly budget scheme (by payment book, direct debit or standing order)
By payment card from your fuel supplier
Through a payment meter, buying power cards for electricity or an amount of gas on your quantum meter card
Paypoint: Buy gas using your gas payment card at local outlets
In some cases, deductions can be made from your Income Support/Income based Jobseekers Allowance

Telephone

As the bill comes in
Monthly by direct debit
By Easipay payment card
Paypoint: Pay using your card at local outlets

Rent/Council Tax

Weekly, fortnightly or monthly using your payment book/rent card at your Local Office
By standing order or direct debit from your bank
Sometimes deducted from your wages (if your employer agrees)
Arrears can be deducted from your Income Support/ Income based Jobseekers Allowance

Other Creditors

By weekly/monthly payment books
By standing order/direct debit from your bank
By cheque/postal order
Sometimes via collectors coming to your door
At the creditor's local shop/branch

Money Saving Tips

Grocery shopping

Don't go grocery shopping when you're hungry
Plan your weekly menu
Make a list and stick to it
Use 'money-off' coupons from papers
Use supermarket points cards
Shop late at night for marked down prices
Buy in bulk (three for price of two etc)
Think twice about special offers - do you really need them

Fuel/utilities

Learn how to read your meter
Take weekly readings and work out what you use
Think before using power (can you hang your laundry up to dry rather than use the tumble drier)
Save up laundry/dishes until load is full
Only fill up your kettle to the amount you need
Use the telephone only when necessary
If you have a large family, think about having a pin number on the phone to limit use

Other Ideas

Check to make sure you are not over insured
Check your tax code
Shop around for credit
Pay bills according to your income (weekly, monthly etc)
Check your budget regularly to make sure you are living within your means
Try to save for holidays rather than taking on credit to pay for them
Use two bank accounts (an income account and a bills account)

Keep Debt Under Control

The Trading Standards Institute has produced a number of guidance leaflets on credit and debt. The key messages are:

Think before you take out credit
Shop around for credit to get the best deal
If you have debt problems get advice quickly

Budget Planner

Taking the time to work out your budget really does help to see where your money is going. It’s then easier to see where you can make some savings to help balance the books or to give yourself some spare cash.

You can check out the Office of Fair Trading's 'Home Budget Planner' on their website at www.oft.gov.uk.