Bolton Citizens Advice Bureau - Dealing with Debt problems

Dealing with Debt problems

What you can do

At Bolton Citizens Advice Bureau we can advise you on all aspects of debt and the course of action open to you. We can help with preparing a budget statement, negotiation with creditors and representation at county court hearings.

The first thing to remember about dealing with debt is not to ignore the problem and hope it goes away, so you are doing the right thing in looking for advice.

Look carefully at your spending and see if there is anything you are able to cut down on. But don't be over-ambitious or you will not stick to it. Then work out how much you can realistically afford to pay your creditors, taking into account any priority debts. Let your creditors know the amount you think you can repay each month and ask them to freeze any interest.

There is more information about how to negotiate with creditors on AdviceGuide including how to make an offer and sample letters to use.

Come into the Bureau where we can advise you and get in touch with your creditors on your behalf if you wish.

On our Podcasts page, we also have some basic debt advice in English, Gujarati and Urdu that you can download and listen to.

Questions & Answers about Debt

Why are more and more people getting into debt?

CAB advisers have been dealing with an alarming increase in the number of consumer credit debt enquiries which have doubled over the last 8 years and we now handle almost one and a half million new debt problems every year. And this figure is continuing to rise. Some people are over-committing themselves, but for the vast majority they have been managing until something happens and they can no longer keep up. Things like losing their job, or overtime even, or falling ill, or their relationship breaking down, or even a rise in interest rates that will tip them over the edge into debt.

So what sort of problems are you coming across?

The impact of unmanageable debt on people’s lives can be overwhelming. By the time they go to a CAB for help, a lot of people can’t cope anymore and their lives have been devastated. Some have let it spiral out of control, some have tried to borrow their way out, and all of them feel isolated and unbearably stressed. Most people said that they had not been treated sympathetically when they had tried to negotiate with creditors before visiting the CAB, and harsh methods of debt recovery can often make debts spiral out of control.

What sort of advice can a CAB give?

Our advice is free, confidential and non-judgemental. We take a long hard look at people’s circumstances and work out the best practical plan together that will get them out of debt, if they stick to it. We’ll also negotiate with creditors. We can’t wave a magic wand, but we can and do help people to get back in control of their money and their lives.

But at the end of the day, people have to take responsibility themselves and not take out credit if they can't afford it?

It's not always that straightforward. Most people take out credit when they can afford it and then there’s a change in their circumstances. Certainly, people should look very carefully at whether they are over committing themselves. But lenders also have a responsibility not to encourage people to borrow more than they can sensibly afford.

But doesn’t bankruptcy and insolvency just encourage people to take out more and more?

Bankruptcy is not an easy option and it’s not a cheap one either, it costs the best part of £500 to go bankrupt and it can affect your life for up to 6 years. By the time people go bankrupt or become insolvent, it’s usually after trying all other options. There are no quick fixes to debt but CAB money advice gives people options and an understanding of how to manage their money for the future.

So, what would you like to happen? What do you see as the solution? What should people do?

We’d like people to be aware of the hazards of falling into debt and to get help from a CAB long before it becomes a serious problem. But we can help anybody to get a grip on their money.

So don’t panic; but don’t ignore the problem. Don’t pay the person who shouts the loudest, pay the important bills like your mortgage or rent, so you don’t lose your home; pay your electricity and gas bill so you don’t get cut off.

And get help from us – we take a long look at what’s coming in; what’s going out and will negotiate with creditors. We help people get back in control.

And have a look at www.adviceguide.org.uk. It’s got a lot of useful help on debt and is available in Punjabi, Bengali. Gujarati, Urdu.

But also, there has to be alternatives to high cost credit for those on very low incomes and there has to be more responsible lending and borrowing. And certainly funding for more free, independent money advice is needed.