What is debt?

Debt is simply when one person owes another something. Debt is seen as a negative thing however it is important to point out that everyone has some debt from a mobile phone contract to rent on their flat but what happens when it's no longer manageable and how should you deal with it?

Debt has become more of an issue since the amount of debt that people have has been going up. One of the reasons for this is that it has been easier to borrow money either with a loan or on a credit card and many run into problems because they borrowed more than they are able to pay back.

Probably the best advice that you can get is to think carefully before borrowing any money. Make sure that you will be able to afford to pay the money back.

Top tips for dealing with debt

What to do if you are struggling to pay off what you owe:-

• Act quickly - As soon as you realise you can't make a payment, seek help and tell the person you owe money to. If you let them know why you can't pay, they might be more reasonable.
• Pay something - If you owe £100 and can't afford to pay the full amount then paying something towards it is often better than paying nothing. It will also start to pay off some of your debt rather than letting it mount.
• Maximise your income - Find out if you have all the money you are entitled to such as grants, benefits and loans and maybe look into getting a part-time job.
• Prioritise - Know which of your bills should be paid first. Not paying some bills might have serious consequences e.g. not paying your rent could leave you homeless.
• Budget - Showing that you have a plan to pay back any money might help your case when looking at extending the loan payback period. It should also make things seem a little less scary if you know how much you owe and exactly how you are going to pay it back.
• Borrow carefully - Borrowing money to pay off your bills or rent might seem like a good idea because you've paid that particular bill however you've just added a considerable amount to your debt thanks to the borrowed money. If you really need to borrow think very carefully about whether you will benefit from it in the long run and how you will make the repayments. Always get advice first.

Where can I go for help?

National Debtline - A helpline that provides free confidential and independent advice on how to deal with debt problems. Call 0808 808 4000 or visit the website.

Consumer Credit Counselling - Service who are the experts in drawing up plans to manage debt including advising on how to make proposals to creditors to reschedule payments so that they become manageable. Website

The local Citizens Advice Bureau will provide debt counselling. Visit the local office or the website here.