Dealing with Debt |

Debt can be a problem at any age, but you may find that as you get older you struggle to manage on the income that you have. There are many factors that can lead to debt problems, including retirement, illness, disability, divorce, bereavement and poverty. Inadequate pension provision can also lead some older people to use credit for essential household goods, resulting in debts with high interest repayments.

There are organisations that can help you to deal with your debts and it is important not to panic. If you are in debt, the worst thing you can do is to ignore the problem, as it will only get worse.

Contact the Money Advice Team

The Money Advice team can help you to take control of your finances and provide you with solutions for dealing with your priority and non-priority debts.

For more information or to book an appointment, please call

or via email on

Make a list of your debts

This is the first thing that you need to do in order to tackle the problem. Make a list of all the people that you owe money to. These are called your creditors. Write down their name and contact details, your account or reference number, and the amount of money that you owe. Once you have completed this list you can then work out which debts to deal with first. Some debts are more urgent than others, which is explained below.

Priority Debt

Priority debts can have serious consequences if they are not dealt with. They include the

Mortgage or rent arrears
Fuel arrears
Council tax arrears
TV licence
Court fines
Arrears of maintenance payments, including Child Support
Income tax or VAT arrears
Hire purchase debts in some circumstances

Non-payment of the above debts could result in you losing your home, having your fuel supply cut off, your essential goods being repossessed or bailiffs taking your belongings. As a final resort you could be sent to prison or be made bankrupt.

Non-priority debt

Non-priority debts are not as urgent, as the consequences of non-payment are not as severe. They include the following:

Benefit overpayments
Credit debts such as overdrafts, loans, credit cards hire purchase and catalogue debts
Student loans
Money borrowed from family or friends

It is still important to acknowledge and to deal with these debts, but they are not as urgent as the priority debts.

Work out your budget

To do this you will need to list all of your income and expenditure. It is important that you are honest about your expenditure or you will not be able to produce a realistic budget plan.

The following list gives some ideas of the things that you will need to include: