Well, firstly, if you are on a low income, it might be an idea to check that you are getting all the benefits you are entitled to. At the CAB we can do a full benefit check. If you are working, we can check that your income tax is correct.

Then we would look at exactly what you owe and divide the debts into what we call ‘Priority’ and ‘Non-Priority’ debts.

"Priority Debts" are those where not paying can lead to losing your home; losing essential utilities like gas, water or electricity; or in some extreme circumstances being sent to prison – for example for non-payment of fines or council tax

"Non-Priority Debts"  are all other debts, where the creditors (the people you owe to) can only take you to you to County Court. Credit cards, unsecured loans and catalogues are all  examples of "non-priorities"’

Will you look at my income?

Yes, the next step in the debt process is to look at how much money is coming in, and how much is needed for essential spending such as food, keeping your home running, clothes and transport etc. If there is anything left after your essential spending including your priority debts, it can be offered to your creditors.

It is most important to contact priority creditors first and try to negotiate a payment you can afford. Afterwards, you can make offers to non-priority creditors from anything you have left.

Most creditors are reasonable if you contact them, act reasonably and support your offer of payment with details of income and expenses. Its very important though to make sure you don’t offer more than you can afford.

Anyone who feels unable to cope with financial problems should visit their local CAB, where help can range from budgeting advice to negotiations with the client’s creditors to arrange affordable payments.

The service is free and confidential, as with all of the issues that we advise on, our advisers are there to assist you, not to make judgements about you.