How to deal with debt

Dealing with large debts can feel overwhelming, which means it’s important to take a step back and look over your financial situation to ensure you are approaching it the right way.

Here at PayPlan, our advisers can help point you in the right direction and we believe that simply seeking help or reading a guide such as the one below is a brilliant first step towards securing your financial future.

Dealing with debt 

It’s important you take the following steps to deal with your debt effectively and get back to living comfortably again:

1 – Check who you owe money to

The first step when it comes to dealing with debt, is to check who you owe money to and how much.

This means going over your credit report with a fine tooth comb and ensuring all the debts that you owe are present and correct. We have more details here about how to check your credit report and how your rating is worked out that will help with this first step.

If there are any credit products listed on there that you don’t recognise or think are incorrect, the first thing you need to do is get in touch with the lender who is listed against them.

What If The Debts You Owe Aren’t Listed?

If you know you owe money to a lender but cannot see them on your credit report this can be for a couple of reasons:

  • Some lenders don’t always add debts to credit reports.
  • Credit information only appears on your report for six years, after this time even if the debt isn’t paid it will be removed.

What Can You Do?

First, check all three credit reference agencies (Experian, Equifax and CallCredit) and if your debts still aren’t listed on any of them and you don’t know what you owe, then you could do the following:

  • Get in touch with your creditors directly – This may feel scary, but picking up the phone and contacting creditors directly will give you the quickest answer when it comes to what you owe and the state of the account.
  • Check online records – Use the Trust Online database to search for yourself to check if there are any CCJs listed against you that you may not be aware of. You will have to pay a fee of £4 to access this information, so bear this in mind.
  • Check your bank account – You should be able to see who your debt repayments are being paid to, as most people have Direct Debits set up to repay what they owe. If you use online banking services you can check older versions of your statement, but you can also ask your bank to help you with this too. It’s also worth checking your cancelled Direct Debits list to see if there are any creditors listed on there.
  • Wait for contact from creditors – If you still cannot find information on your debts, you may simply have to wait until your creditors contact you again. Keep your address updated as much as possible to ensure they can find you quickly.

2 – Locate any letters or documents you need

It’s important you have all the documentation you need to get your debts in order. This means finding any contact you’ve had from creditors chasing you for payment, so you are confident about who needs paying what.

This can also help if your debts aren’t listed on your credit report. If they’re older than six years for example, so you can see what you owe and where you need to pay.

3 – Deal with any serious instructions first

By this, we mean deal with any CCJs or default notices that have been issued against you – before anything else. These are serious, legal issues that may require you to attend court if they are not properly sorted straight away.

4 – Understand your rights

When dealing with debt, you should look into and understand your rights.

If you have received treatment that you consider to be unfair from creditors you owe money to, it’s important you tackle this and there are rules and regulations to keep you safe. Some people have reported harassment from creditors and it’s important that if you feel like you are being harassed you seek the right help.

Creditors are entitled to chase you for money that they are owed and are also able to contact you via phone, letter or even a home visit. However, there are some restrictions on what they can do and the following examples are actions that they should NOT be carrying out:

  • Lending money without a credit licence.
  • Encouraging you to take out more debt to pay off what you owe to them.
  • Take payments without your permission.
  • Calling at unreasonable times of day or night, or at your place of work without permission.
  • Using jargon and legal language to confuse you.
  • Claiming that they have legal powers.
  • Refusing to deal with a debt management company that you have sought help from.
  • Not providing you with information about your account when you ask.
  • Sending you letters that look like official court forms.

Make A Complaint

If you have experienced any of the examples above, keep a record of when these things happened and exactly what was said and by who. When you are dealing with your creditors directly, always get the name of the person you are talking to, to ensure you have someone to refer to later.

You should then make a complaint directly to your creditor and keep a record that you have done this.

Make your complaint in writing – you can send either a letter or an email – and use it as an opportunity to tell them:

  • what you feel they have done wrong
  • what you think they need to do to sort the problem
  • and ask them to stop any further action until they have investigated your complaint.

You should also ask for their reply in writing. Creditors must investigate all complaints in a professional manner before they can continue chasing for repayment.

5 – Ask for breathing space – if needed

Breathing space is something you can ask of your creditors, to allow you time to get your debts and finances in order and begin repaying what you owe.

What is breathing space?

Breathing space means creditors will stop contacting you for payments for a set period of time, which can allow you to focus on getting your repayments in order without fear of the phone ringing or knocks at the door.

How much breathing space are you allowed?

Most creditors will allow you 30 days. But you must contact them directly to make them aware that you are having financial difficulties and seeking professional help. They will want evidence that you are doing something to rectify your problem, or they may not be inclined to allow you the breathing space.

6 – Decide which debts need to be paid first

If you owe multiple debts, you should decide which is a priority and needs paying off first. There are certain debts that are considered to be a priority and these include:

  • Mortgages or secured loans
  • Council tax
  • Rent payments
  • Court fines
  • Child maintenance
  • Tax or National Insurance
  • TV licence
  • Utility bills – including gas, electric and water
  • CCJ fines

If you are behind on repayments for these expenses, these are the ones that must be tackled before anything else – such as credit card debt or a personal loan. If you do not rectify these debts first you run the risk of repossession on your personal items, more fines or visits from bailiffs.

7 – Seek support from friends and family

Dealing with debt is much easier when you have people who love you at hand to support you with every step and encourage you to tackle your debts. If you have not yet told your partner about your debts, this can be a scary prospect but it’s important you confide in them.

We conducted research early this year, on how debt affects people and discovered that 33% of those dealing with debt experience sleepless nights and 40% feel low. It’s so important you have the support of those close to you to get you through this period of your life.

8 – Speak To An Expert

Once you feel ready and have everything to hand that you need it’s time to speak to an expert about your situation. They may be able to point you in the right direction or offer another solution that you may not have thought of before.


If you are struggling with debts and are looking for further advice then our guide on how to get out of debt offers a step by step process you can follow. Our team at PayPlan can also offer impartial and free advice about your situation and how to deal with debt. Get in touch today via phone – 0800 280 2816 – or live chat and tackle your debts, today.