If you find yourself in debt following the breakdown of a relationship it is important to seek advice from an independent advisor. They should be able to renegotiate some of your repayments, and your local Member of Parliament may be able to assist where Government Agencies are involved or you feel that unreasonable demands are being placed upon you.
Dos and Don'ts
Do: Deal with the problem if you have one. Seek independent advice immediately and be sure that anyone you are turning to for help can be trusted.
Do: Make sure that you open your mail and reply to companies asking for repayments, or you may find yourself in court.
Do: Remember that you are not alone, and debt can be solved.
Do: Try and find ways of earning extra money and try to cut your cost of living down.
Do: Avoid quick solutions such as credit cards and companies offering unsecured loans with high interest rates. Such companies prey on people in difficult situations, and it is unlikely to solve your problems in the long term. Indeed your repayments could end up higher than they were in the first place.
Do: Consider consolidating your debts, but shop around for a good interest rate on loans and read the small print carefully. Make sure that the interest rate is fixed and you can meet the repayments.
Don't: Make yourself ill worrying. It's only money and there is a solution. See our section on Coping with Stress.
Don't: Go into details with creditors about your other debts or circumstances.
Don't: Try to borrow your way out of debt without seeking independent financial advice first.
Don't: Pay one creditor in preference to another. You may find yourself in legal difficulties if you do.
Don't: Allow Bailiffs or Collection Agencies to intimidate you. Seek advice if you are contacted by a Bailiff and do not let them onto your property until you have done so.
If you find your debts unmanageable and see no prospect of paying them off, you may be considering Bankruptcy. Seek independent advice first and bear the following points in mind:
* There is not the same stigma attached to bankruptcy as there used to be. If you cannot realistically pay off your debts, it is better to clear them and start again.
* You must be aware that all of your assets, however acquired, will become subject to the bankruptcy. This means property, cars, bank accounts, financial investments and pensions may be sold or frozen. This may include any assets disposed of within two years preceding the Bankruptcy.
* Ensure that you include all debts which may include maintenance or child support, including arrears. If you forget to include a creditor they can continue to pursue you for payment.
* Your bank accounts may be frozen and reopening one may be difficult. However, do persevere as many banks are now revising their policies towards bankrupts.
* Seek advice from the Citizen's Advice Bureau or the Official Receiver's Office who are very helpful.
For further advice on debt and bankruptcy issues:
Citizen's Advice Bureau
The CAB offers free information and advice on all aspects of financial matters, including pensions and state benefits. Find your local office and check that you are receiving all of your entitlements
Consumer Credit Counselling Service
A registered charity offering free, confidential debt counselling and money management guidance
A voluntary organization offering assistance and emergency help on all aspects of debt.
The Insolvency Service
A Government agency set up under by the Department of Trade and Industry, dealing with insolvency issues in England and Wales. You can order forms from here to proceed with your Bankruptcy.
The Inland Revenue
Offers information on Bankruptcy Issues and tax implications for businesses and individuals