12 February 2012
This information applies to Scotland only
If you have a problem with debt, it's important not to panic but don't ignore it either – it won't go away.
To deal with a debt problem, you will need to:
This page tells you how to start dealing with a debt problem. It tells you:
For other pages which deal with debt on Adviceguide, see Further information. The most important first step is to work out your budget.
If you are worried about how to deal with your debts, there is free, confidential advice available.
If you have business debts as well as personal debts you may find it helpful to look at the Business Debt website at www.bdl.org.uk/scotland.asp.
Your local Citizens Advice Bureau can give you advice about debt problems. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.
The first thing you will need to do before you can tackle a debt problem is to sort out how much money you owe. To do this, you will need to make a list of all the people and companies you owe money to (your creditors). You will need to collect the following information for each debt:
It’s a good idea to keep the latest letter or statement for each debt together in one place so that you can easily find them if you need them.
If you've received any court papers or letters that seem urgent, you may need to act quickly. If you are not sure from the papers what you should do next, get advice straight away from an experienced adviser.
Your local Citizens Advice Bureau can give you advice about a debt problem. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.
Once you've made a list of all your creditors, you need to work out which debts are the most urgent.
Some debts are more urgent than others because the consequences of not paying them can be more serious than for other debts. These are known as priority debts, for example, for rent or mortgage payments. If you don't pay these, you can lose your home.
If you've got any money to pay off your debts, you must make sure you can deal with any priority debts first, before you deal with any less urgent debts such as credit card debts, overdrafts and other loans. These type of debts are known as non-priority debts.
Priority debts include:
You may have other debts which you think it is particularly important to pay. For example, if you're disabled and rely on your car to get around, you may need to make paying for your car a priority debt.
You need to think very carefully about which debts you treat as the most important ones. You must have very good reasons, as you might have to convince a court or your other creditors why it is reasonable for you to treat these debts as more important than others.
For more information about dealing with priority debts, see Dealing with priority debts.
Non-priority debts include:
You can't be sent to prison for not paying non-priority debts. If you don't make any offers to pay, without explaining why, your creditors may take you to court. If you still fail to pay when the court has ordered it, your creditors can take further action to arrest your wages or your bank account. If you owe a number of creditors a lot of money they could make you bankrupt.
If you don’t keep up payments under a hire purchase agreement, the lender may be able to take back the goods. Depending on how much you have paid, the lender may not need to get a court order first.
For more information about dealing with non-priority debts, see How to deal with creditors of non-priority debts.
Once you've worked out how much money you owe and sorted your debts into the urgent and less urgent ones, you'll need to work out if you've got enough money to pay them off.
To do this, you will need to work out your budget.
For information about how to work out your budget, see How to work out your budget.
You can get more information about how to deal with debt on the following Adviceguide pages:
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