Gathering Data About The Money You Owe

If your debts have increased to an uncomfortable level, there’s some things you can do to help.

For Cases Where Urgent Assistance is Required;

Seek guidance if your debt issues are urgent. This might be, for instance, if:

• You are facing eviction for outstanding rent
• You are facing eviction for outstanding mortgage payments
• You are facing legal action for outstanding debts
• Your electricity or gas company has threatened to cut your supply
• You are receiving visits from sheriff officers

Compiling A Debt List

Assemble all the data about the money you owe, like bills, statements and contracts. For instance, your debts may include:

• Unpaid rent
• Unpaid credit cards
• Unpaid council tax, including outstanding bills for sewerage and water
• Electricity and gas bills
• Cash that relatives and friends have lent you
• Write a detailed list of every debt you have. Some of the information to include could be:
• The people you must pay — i.e. your ‘creditors’
• The dates of your first missed payments
• The amounts you have outstanding – these may be shown in recent statements
• Your reference or account number — often, this is shown prominently on your statement

The actions taken by your creditors to retrieve the money – for instance, sending letters to you or commencing legal proceedings.

Do not let the sight of all the money you owe written down worry you. The key thing is to focus on sorting it out.

If you are unsure whether a debt needs to be paid, find out whether you are legally required to.

Obtaining Credit Reports

A credit report shows what cash you have borrowed and repaid. It is wise to obtain copies of all your reports, to find out whether you have the correct information for your debts.

Copies of credit reports are available from three credit organizations for a fee (usually £15);

There are some websites that will provide you a credit report for free, although the detail can sometimes be less than the paid versions;

Request a ‘statutory report’. It is worth obtaining reports from each organization, because occasionally they have conflicting information.

Not every detail of your debts will be shown on your credit reports, in many cases. Therefore, you should read the letters you received from your creditors as well. Usually, credit reports do not feature changes that have occurred over the past four to six weeks. Also, they will not show whether you have:

• Arrears in council tax
• Arrears in income tax
• Overpaid benefits
• Cash you owe to friends and relatives
• Payments you owe to contractors, like lawyers or builders

Find Out Whether To Get In Touch With Your Creditors

There is a time limit on how long your creditors can wait, before taking you to court for unpaid debts. For most debts, five years is the limit, but it can be twenty years for certain kinds of debts. Recently, several court cases have hinged on when time limits come into effect.

With some debts, these limits might come into effect on the day that the termination notice was sent to you. Time limits might restart if you make a payment or send a letter to your creditor.

Avoid contacting your creditor, if:

• It has been more than five years, because they may be unable to enforce the loan agreement
• It will be five years soon, because getting in touch with them may reactivate the time limit
• Find out whether the time limit is void, this is also called ‘statute barred’.

Dealing With Creditors

In most cases, you ought to get in touch with your creditors. The only exceptions to this are if the time period for them bringing legal proceedings has expired or will expire shortly.

Inform them that you are attempting to manage your debts. Request that they:

• Verify your debt details
• Stop contacting you about the debts, while you determine what steps to take
• Stop increasing the debt size, by adding fees and interest

Normally, it is best to send a letter or email. This way, you will have written proof of their response. We have a letter template that will assist you when writing to them.

Do not contact your creditors about old debts, because the time period for court action might have passed.

What To Do Now

Do not fret if your debts seem overwhelming. With a solid plan, all debt problems are solvable. Your next task is to decide which debt to tackle initially.