Dealing with a drop in income
When you are faced with a change of circumstances, such as a reduction in your working hours, ill health, loss of a job, cut backs on extra shifts or increased living costs it can be hard to keep on top of your finances. For some people, this may be a short-term concern but others may be faced with longer-term financial difficulties.
What can you do?
It is best to approach your debts step by step. You cannot make an offer of repayment or consider other options until you know what you can afford to pay. You don’t know what you can afford to pay until you have worked out how much money you need to live on.
1.) Work out what you need to live on so you can see what is left available to pay your debts
Our advisers can help you with a personal budget which can be used as a statement to explain your financial situation to creditors and to work out affordable offers of repayment.
2) Check that you owe the money
In some cases, creditors may not have acted properly in the way they provided credit or money. Your name may not be on the credit agreement. If your debt is over six years old and you haven’t heard from the creditor, it may not be enforceable. The account balance may be wrong or you may have wrongly incurred charges. Our advisers can check these issues and advise you on your rights and liability for the debts.
3.) Make offers to the most important creditors first - priority debts
If you have any of the debts listed on the previous page, you should ensure that what money you have is used to pay these debts first before any others.
4) Deal with the other debts
Once you have made repayment arrangements for your priority debts, you can deal with the other debts you have
5) Stop further action being taken against
If your your creditors start court action, don’t panic as you can still make offers of repayment and stop further action being taken against you