How to deal with your Christmas debt hangover - In England

If you have over-spent at Christmas:

• Don’t panic and don’t bury you head in the sand.
• Avoid borrowing further to try and pay off existing debt – this is likely to lead to more problems in the long run.
• Talk to your creditors - don’t just stop payments without explaining why. They can sometimes be more understanding than you’d expect.
• Sit down and work out how much you owe and how much you need to pay your priority debts, like mortgage, rent, gas and electricity bills and council tax. Don’t fall into the trap of paying whoever shouts loudest first.
• Make sure you pay the priority debts first every month and then work out how much you need for food, travel to work and other everyday expenses.
• Once you’ve done all of that, you can start to work out what you can afford to pay each month to non-priority creditors like credit and store cards.
• If what you have left doesn’t cover what your non-priority creditors are asking for each month, speak to them and come to an arrangement about how much you can afford to pay them.
• Only offer to pay off debts at a rate you can keep up – it is easy to be panicked into offering more than you can afford.
• If you need help to do that or they won’t listen, make an appointment to see a money adviser at your local Citizens Advice Bureau.
• Think twice before paying for debt advice – Citizens Advice is the largest free independent money advice-giving organisation in the country, so we’re used to dealing with creditors on your behalf!

Why not make a resolution to stay on top of your finances this year?

• Use standing orders and direct debits to meet regular outgoings such as rent, mortgage, utility bills or council tax.
• If you can pay for goods outright, don’t be persuaded to take out credit unless it really does work out cheaper or better meets your budgeting plans.
• Try to save something every month, especially for planned spending like holidays and Christmas.
• Set up a standing order to a savings account. You will be surprised how quickly you will forget you are saving!

For more information about credit and debt, see our Debt section, including our wide range of Credit and debt fact sheets.

The Citizens Advice Bureau can help you to prepare a budget and offer suggestions on how best to manage the situation. Our advice is free, independent, impartial and confidential. For more information and advice about debt problems, visit your nearest CAB.

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