Golden rules of debt by Finance News Bulletin

Published: 26/10/06

persons who are in debt are already under considerable pressure, but they can exacerbate their trouble by falling into traps while annoying to deal with their debt problemAn adviser from a leading indepedent free money owing helpline gives her golden rules for commerce with debt and steering clear of the pitfallsYou should be particularly cautious of taking out a loan secured on your house to consolidate the debts you already haveIf you turn unsecured loans into a mortgage you could lose your house if you university teacher't keep up the paymentsConsolidation loans mean borrowing more money, over a longer era and will mean more interest to pay

This could make your state of affairs worse in the extended runThe service provides self-help advice to callers and also provides information booklets and factsheets, as well as assisting callers with the setting up of Debt Management PlansExplain your situation in writing and back it up with a detailed personal financial plan outlining your income and outgoings and showing your creditors how much you can afford to disburse them every monthContact everyone you be indebted money to If you create arrangements to pay some creditors but not others, you could run into difficulties again

If the first being you deal with is uncooperative, ask to speak to someone more senior who may be able to agree to your offer of paymentmain concern debts are those that could lead to you losing your home, being dispossessed, having your gas or electricity cut off, or lead to finesThis means you should create sure you have made arrangements to pay your necessary household bills such as your mortgage or rent, loans secured on your house, council tax and utilities before making offers to pay unsecured credit debtsYour debt situation may get a lot not as good as if you miss payments on your mortgage to keep up to day with a credit card

Make sure you are claiming all the benefits you are able to: Could you claim duty Credits Are you sick or have a disabilityAge Concern's information line: 0800 00 99 66; Help the old's Seniorline: 0808 800 6565; (0808 808 7575 Northern Ireland); The retirement fund Service's website or Department for labour and Pensions websiteTax credits are administered by the Inland Revenue: 0845 300 3900 (Great Britain); 0845 603 2000 (Northern Ireland)British chat Warm-a-life scheme offers benefit checks and energy saving tips gratis of charge to people living in confidentially owned or confidentially rented houses in receipt of profits related benefits (not just British Gas customers): 0845 605 2535Locate a local recommendation service in your area through recommendation UK website or the Community Legal Service website (CLS Direct - see link on right)Contact an self-governing welfare rights organization for advice and a benefits check(see information box for more details)If you have lost your job, or are off work because of illness, make sure whether your payments were covered by payment defence insurance

Contact the credit company if you are not sureYou may also be able to save money by switching to improved deals on a range of goods and servicesBe very careful before entering into any kind of debt management programme with a company that will charge you for categorization out your debtsFree debt management plans are obtainable which means that all the money you can afford to disburse goes on disburseing your debts back instead of on monthly fees

You can also go and see a local recommendation agency such as a Citizens Advice Bureau or one of Advice UK's money advice centres call their websites for more details about how to get in touch with local offices (see website links on right)The opinions spoken are those of the author and are not held by the BBC unless specially stated The material is for general in order only and does not constitute investment, tax, legal or other shape of advice

You should not rely on this in order to make (or refrain from making) any decisions Always obtain self-governing, professional advice for your own particular situationRefused credit Ex's amount overdue 1 Ex's amount overdue

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