Young Wrexham

Debt management

If you find yourself in debt, it is important that you address it immediately. It won't go away by itself. But don't panic – with the right help, you can manage your debts.

• An important first step to managing your debts is to create a picture of your financial situation and make a 'budget'
• First write down all of your debts and split them into priority and non-priority debts (see the Debt page for more details)
• Make sure you pay all priority debts first, such as mortgage repayments, rent or bills, before you tackle non-priority debts, like credit card bills or overdrafts
• Work out your income and expenditure – and be realistic
• Contact the people you owe money to (the creditors) and explain that you are experiencing money problems. Make sure you get this in writing to them and send them a copy of your budget. They might be able to reduce your payments for a period of time
• Do not borrow money to repay your debts. Try and increase your income instead by taking on extra work or claiming benefits if you are on a low income, for example
• You might also want to think about asking close friends or family members for help or look at any goods you might be able to sell to pay off the debt
• To better manage your debts, you could try and negotiate with your creditors. This can be difficult and take time so you might want to ask for help from the Citizens Advice Bureau
• Creditors will want to know everything about you and your partner's finances and may not be as flexible as you'd like in agreeing to reduce payments, especially if it is for a priority debt like a mortgage
• When negotiating, be realistic. Only offer to repay what you can afford and be clear about what you want them to agree to
• It is not unusual for creditors to pressurise you and not agree to your offers but don't be disheartened. Try and reach a compromise that suits you both if you can, but never agree to pay more than you can afford or your debt problem will only continue
• Be prepared to prove you can't afford above a certain level with evidence like wage slips, benefit slips and expenditure receipts, like fuel bills
• If you are worried about contacting creditors or managing your debt alone, talk to your local Citizens Advice Bureau in confidence which can work on your behalf and help you manage your debts. It can also help if you feel you are being harassed by a creditor

Debt Management Companies (DMCs)

• Debt management companies help people repay non-priority debts, like credit card bills, for a fee
• They will either consolidate all of the debts into one debt that you will repay to the DMC or they will negotiate with creditors on your behalf
• Although DMCs do help some people with their debts, many creditors do not like working with them
• You will also have to pay a large fee for their services, usually around £200, and this could push you further into debt. Some also charge administration fees each month on top of this
• Find out all of the costs of working with a DMC before agreeing to anything and consult your creditors and Citizens Advice Bureau first

Getting help

• Being in debt can be extremely worrying but please don't panic. There are plenty of options open to you and people out there who can help
• But if you want to get out of debt, you must take action straight away
• Talk to the experts at Citizens Advice Bureau or on the National Debt Line who are there to help you in confidence and for free

The Money Advice Service has an excellent section on debt managment including:

• Talk to the people you owe money to
• Where to go to get free debt advice
• How to prioritise your debt
• Help if you’re struggling with debt
• Quick and easy debt health check

You can contact the Money Advice Service on 0300 500 5000 (or 0300 500 5555 for Welsh) Mon - Fri 8am-8pm, Sat 9am-1pm. There’s also an online chat function on their site.

You can contact Meic for free via online chat, text (84001) or phone (080880 23456).