Moneymanual - Single Parents 
Moneymanual - Thinking about Money
Dealing With Personal Debt
Money Manual for StudentsStep 1 - Contact all creditors
Creditors cannot help you unless they are aware of your difficulties and circumstances. You may also need to ask them to confirm full details of the amount owing, actual arrears, penalty charges etc. The following is a typical letter:Your address
Date
Dear Sirs
Account/Agreement Number
I am currently experiencing financial difficulties due to................ and I am therefore unable to maintain the full payment on my account. I am trying to resolve my situation and will send you a financial statement as soon as possible with the best payment offer I can manage.
Please let me have the following information so that I can draw up a schedule of all my debts and make appropriate offers to my creditors:
Type of agreement (secured/unsecured)
Balance owing
Terms of repayment and interest/penalties accruing
Arrears
Any insurance policy attached to the agreement
I will write to you again as soon as I have received replies from all my creditors.
Yours faithfully
When all the replies have been received draw up a schedule of your debts and divide them between PRIORITY and SECONDARY creditors (see STEP 2). It is essential at this stage to mark any debts where court orders (County Court Judgments or CCJs) have been made or a claim form received and seek specialist help as these debts need immediate attention.
Keep copies of all correspondence both sent and received. If any agreements are subsequently made by telephone get the name of the person you spoke to and ensure that the agreement is confirmed in writing.
It is important to check that you are actually responsible for all your debts. A husband and wife are not responsible for each other's debts unless they have both signed the agreement (except for Council Tax), and you cannot inherit a dead person's debts. Checking whose debts they are
You should also check the amount being claimed to ensure all the payments you have made have been deducted, and challenge any excessive interest or penalty charges.