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How to manage your debt 

Whether you’ve received our guide in the post or are simply looking for help in dealing with your debt, Payplan’s exclusive “Helping you manage your debts” is a three-step guide that provides invaluable step-by-step assistance for anyone setting up an informal arrangement with their creditors.

This guide will help you to review you income, prepare your financial statement and make offers of repayment to your creditors.

Helping you manage your debts (PDF) – Can’t view the pdf? Download Adobe Reader here.

3 steps to managing your debt

1. Reviewing your income

 By completing a simple review you may be able to do one or more of the following; maximise, boost or save to increase your income. You  can also review your bank account to find a safe account that isn’t linked to any of your creditors.

2. Preparing your financial statement

By identifying your priority debts (those that can have serious repercussions if you don’t pay) and your non-priority creditors (unsecured debt such as credit cards and store cards) you’ll be able work out what you owe all your creditors.

Use these tables to help you.

Don’t worry if you’re not sure how much you owe, call your creditors or use this letter as a guide to contact them for up-to-date balances.

Putting together your income and expenditure will help you find out what you have coming in each month, what you spend and how much you have left over as a surplus.

3. Write to your creditors

By writing letters to your creditors with offers of repayment, you are setting up an informal repayment arrangement. Priority and non-priority creditors need to be dealt with differently so use these letters as a guide for what to write.

What happens next?

Once you’ve completed the 3 steps, you’ve done the hard bit and you’re on the right path. Even if you don’t hear from your creditors, keep making payments. Sometimes a creditor might request an increase, but it’s important that you continue to make payments at the amount you know you can afford.
It’s a good idea to update your creditors every few months: staying in touch shows that you’re serious about dealing with your debts.

If your circumstances change or improve, it’s possible that the amount you are able to pay can be adjusted.If you have any questions about debt or are unsure about some of the terms or phrases used in the guide, click here to download our Frequently asked Questions and Glossary; Helping you understand debt (PDF).We wish you all the best for the future.

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Example IVA

In this typical example, we arranged an IVA for our client who was struggling to repay his debts. His payments are now more affordable!

  • Debt: £20,000
  • Creditors: 3
  • Was paying: £520 per month
  • Now paying: £120 per month
  • Written off: £12,000
See examples IVA advice

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Here at PayPlan, we understand the effect that debt can have on your life, but we believe that living with debt shouldn’t have to mean living in despair.

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