How to steer clear of debt in the recession
Don't ignore the problem. The longer you leave it the worse it gets.
Don't borrow money to pay off your debts without thinking carefully, especially if the loan is to be secured against your home.
Check your credit agreement to see if you have payment protection insurance, which may cover you in the event of being out of work.
Check that you are claiming all the benefits and tax credits you can.
Work out your household budget and show it to your creditors.
Make sure you tackle your priority debts first, for example, debts which could mean you lose your home, or have essential services cut off.
Get in touch with your creditors straight away and explain your difficulties.
Work out a reasonable offer to repay the money owed. Creditors prefer you to pay a small amount regularly than one you cannot keep to.
Don't give up trying to reach an agreement even if creditors are difficult.
Fill in the reply forms to court papers and let the court have all the facts. You can attach a copy of your budget sheet. Always follow the instructions on the court papers, especially about where to return them.
Always attend court hearings. Take a copy of your budget sheet with you. Don't think that going to the county court makes you a criminal – it's not that kind of court.
Always keep copies of any letters you send or receive, and make a record of telephone conversations in a diary.
Supplied by National Debtline
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