If creditors are at your door, no matter how bad things look, stay calm. Let the initial panic settle, then rationally consider some of these steps.
Do no further harm. This is common sense but easily forgotten. If your debts are due to overspending, stop! Cut up your credit cards. Keep only one for real emergencies if you have to. Draw up a budget and spend only on essentials, like food. Maintain a spending record.
Prioritise your credit card repayment. Pay off the card with the highest interest rate first. When that is done, move on to the next highest interest card. Meanwhile, keep paying the minimum for all the other cards to stay current with your creditors.
Negotiate with your creditors. Ask for an interest waiver. If they are not willing, try for a lower repayment. Go for a permanent arrangement but a temporary period is better than nothing. Explain your situation well; your creditors are likely to be keen to get back some money rather than none if you default.
Get professional debt help to consolidate your debts into one. This is normally considered risky, but there are many debt help agencies out there with different terms and conditions. You may find a loan with a much lower interest rate than what you are paying now. If you take this route, you must stay focused and not add on to the debt while you are paying this off.
Approach StepChange, a charity that offers a host of debt services: from free advice to self-management plans. Their trained advisors can also assist you in negotiating for better deals with your creditors.
The final option is to file for bankruptcy. Although drastic, this may be better than losing some assets that you cannot give up, like a home for your family. You can only file for bankruptcy if your debt is over £750 and there are different processes in England, Scotland and Northern Ireland.


