Dealing with debt can be very stressful and you may be embarrassed to let anyone know that you are having problems but the situation will only get worse unless you take action. The solution may not be obvious or quick or easy but there is always a way out and help is available. Let's start with a quick quiz from the Money Advice Service.
One of the first steps in tackling debt is to make sure that you know how much you owe to each of your creditors. It's important to know which debts should be paid first. Don't be tempted to throw money at the creditor who shouts the loudest. Not all debt has equal priority.
Priority debts include rent, mortgage repayments and loans secured on your home, gas, electricity or Council Tax arrears, TV licence payments and court fines. The penalties for not paying priority debts are serious. You could lose your home, have your supplies cut off or in some circumstances even go to prison.
Non-priority debts include credit card debts, water bills and unsecured bank loans. The penalties for not paying non-priority debts are less serious but you may be sued by your creditors, resulting in a county court judgment against you. These stay on your record for 6 years and can affect your ability to secure credit.
Work out what you can afford and let your creditors know how much you can pay and when. Make sure you focus on your priority debts. Ask them to stop adding interest and ask for a refund of charges. Be realistic in your offer and never promise more than you can afford. Once you have reached an agreement it is very important to stick to it.
Get free, impartial advice from one of the reputable debt charities such as the Money Advice Service (www.moneyadviceservice.org.uk/en/), Step Change (www.stepchange.org) or National Debt Line (www.nationaldebtline.org). Citizens Advice (www.citizensadvice.org.uk) may also be able to help.
The NUS web site has student-focussed advice on financial issues, including debt (www.nus.org.uk/en/advice/money-and-funding/).
The Government web site Money and Tax (www.gov.uk/browse/tax) also contains useful information.
Avoid debt advice companies. They may offer a free initial consultation but they want to sign you up to their debt management plans for which they charge fees.
Think about part-time work if you don't already have a job. As well as increasing your income, work experience is very important for your future job prospects. You can find details of vacancies and lots of useful information on the Careers website.
Look critically at your spending and ask yourself where you can make savings. Planning a realistic budget is the first step. There are lots of on-line resources to help you. You can find budget planners on all the money management charities mentioned above. Sticking to your budget requires real effort and commitment and is one of the most important steps towards taking control of your debt.
Make an appointment with one of the financial advisers in the Student Support Service. You can phone (01603 593184, 01603 591702 or 01603 593290), email firstname.lastname@example.org or call in to the Student Support Centre reception.