Select advice topic
Ignoring your money problems doesn’t make them go away; it can only make them worse.
Being in debt can be stressful and it can be difficult to know what to do first – especially if you are constantly getting letters and calls from the companies you owe money to.
You might be thinking about taking out a loan to pay back money you owe but this can make the problem worse when there might be a better solution for you.
There’s no debt problem that’s unsolvable. Becoming debt free, however long it takes, can improve your credit rating and mean you can think about longer term plans.
We have a team of people ready and waiting to help you if you are struggling. We can help you to manage your debts, plan an affordable budget and look at ways in which you can plan and save for the future. We will also look at ways in which you can reduce your expenditure for example by assisting you to get a cheaper deal on your energy costs.
How does our money advice work?
What you can expect from Citizens Advice…
A Citizens Advice debt adviser will help you understand your rights and responsibilities and those of your creditors. Our debt advice service is free, confidential and impartial. If you wish to cancel advice you can do so at no cost to you.
Confidentiality and Consent
The records we keep are for the use of Citizens Advice only. We will not tell anyone about your enquiry and we will not pass any information to any third party without your permission.
Your adviser will:
- Help you to explore your debt problem
- Look for ways to increase your income and reduce your outgoings
- Explain the debt options you have and how they will affect you
- Keep you informed about any action we take and the progress of your enquiry
In return, we ask that you:
- Attend all appointments we arrange for you (or let us know asap if you can’t)
- Let us know if there is a change in your circumstances that may be affect your case (such as a birth of a child, an increase or reduction in your income etc).
- Provide all the information and the evidence your adviser asks for. e.g. evidence of your income, spending and debts. Failure to tell us everything may mean our advice is not correct
- Do not negotiate directly with creditors before discussing it with your adviser.
- Do not borrow more money or enter into a new credit agreement.
Wherever possible we will give you the information and resources you need to resolve your own debt problem. If the complexity of the problem, or your personal situation, mean this is not possible, we may be able to provide a casework service.
In some circumstances we may refer you to a trusted partner for further help. This may be within the Citizens Advice service or outside of it. We regularly review all our trusted partners to ensure they meet the highest standards of customer service and quality advice.
Our debt advice service is authorised and regulated by the Financial Conduct Authority (FCA). If you are not happy with the service provided to you, please follow our complaints procedure. If you are not happy with our final response you can take your complaint to the Financial Ombudsman Service.
For further information visit the Financial Ombudsman website.
Do you need any extra help, for example, sign language, large print or interpreter service? If so, please let your adviser know. If you have any questions about the content of this information sheet, please speak to your adviser.
As an organisation, we are committed to achieving the best possible outcome for all individuals who seek our assistance. We strive to maintain the highest possible levels of quality across our service delivery and as such, may seek external endorsement on the quality of our work through the achievement of publicly recognisable quality standards. As part of this external assessment, we are required to make a sample of client files available to an independent Assessor for them to verify the quality of our advice and file management.
External Assessors are required to maintain confidentiality in relation to your file and it is important to note that they are assessing us as an organisation and not you as an Individual. If you would prefer that your file did not form part of this independent assessment, please notify your Adviser of your preference in writing.
What happens if I can’t pay my debts?
A ‘creditor’ is someone you owe money to. This guide tells you what can happen when you have difficulties with your payments and what creditors can do to recover money owed. If you miss a payment, or pay less than you agreed, this could mean that:
- your credit rating is affected for up to 6 years – this can make it harder, or more expensive for you to borrow money in future. If you’ve got a payment deferral that has paused or reduced your payments because of the impact of coronavirus, this will not directly affect your credit rating, but lenders may be able to see that you’ve deferred and this might make it harder to obtain credit in future.
- your creditor contacts you more often asking you to pay and may ask a debt collector to collect the debt.
- your creditor can still take action and add charges so the amount owed can increase, even if you’re getting money advice or have agreed to make reduced payments. If you’re paying reduced payments and the debt is getting bigger, let your adviser know.
- your creditor takes court action to recover money owed from you.
Don’t ignore your creditors
It’s important to read letters from your creditors so you know what they’re going to do. They are less likely to take action if you get in touch with them.
If you’ve had no contact with your creditors for a few years, please let your adviser know so they can check whether any time limits may apply
Priority and non priority debts
The action a creditor can take depends on the type of money that’s owed.
Debts are usually split into two categories; priority and non-priority.
A debt is a priority debt if the creditor can take particularly serious action, such as taking possession of your home, disconnecting essential services or having you sent to prison.
Non-priority debts are generally less serious. Creditors can take county court action to get a County Court Judgment (CCJ) that orders you to pay.
In some cases, a non-priority debt might have unusually serious consequences for you, for example:
- if you’re behind in your childcare costs
- if deductions from your benefits are unusually high
- you owe money to family or friends or there’s a guarantor loan and this could cause you personal problems
This information covers England and Wales and is up to date at December 2020. Version 1.6. For further information click here.
Please talk to your adviser as this could be given a higher priority than your other non priority debts.
Priority debts – what your creditor can do | |
Mortgage or secured loan arrears Take you to court to repossess your home. Register default on your credit file. | Rent arrears |
Council tax arrears | Gas and electricity arrears (current suppliers) Deduct money from ongoing benefits. Install a prepayment meter. As a last resort, disconnect your supply. Register default on your credit file. |
Child support or child maintenance arrears | Income tax arrears, class 2 and class 4 NI contributions |
Telephone, mobile phone or telecom package arrears (essential services) | Hire purchase, Personal Contract Purchase (PCP) or conditional sale (essential goods) |
Bill of Sale arrears (essential goods) Repossess goods without a court order. | TV license – if you don’t have one or it’s in arrears |
Magistrates’ Court fines | Tax credit overpayments |
Fixed penalty notices for crimes like littering, speeding, or keeping an uninsured vehicle – this doesn’t include parking penalties issued by a local authority. Prosecute you for the offence. In some cases register the fixed penalty notice as a fine – see Magistrates’ Court fine above. | |
Non Priority debts – what your creditor can do | |
Credit cards, store cards and overdrafts | Unsecured, guarantor and payday loans |
Catalogues and mail order debts | Personal debts, eg friends and family Take you to the County Court to get a CCJ. |
Benefit overpayments, social fund loan, Universal Credit Advance Payment | Non criminal penalty charges like:
(but not parking fines issued in the Magistrates’ Court – these are priority debts) Take you to the County Court or Traffic Enforcement Centre (TEC) to get a CCJ. |
Water charge arrears | Non essential goods and services: Hire purchase: Repossess the goods. If you’ve paid more than 1/3 of the total or the goods are on private property, they need a court order to do this. Telephone, mobile phone or telecom package arrears: Disconnect the service. Take you to the County Court to get a CCJ for any money outstanding. |
If your creditor gets a CCJ against you this will be registered on your credit file for 6 years and might make it harder for you to get credit. If you don’t pay, your creditor can ask the court to:
- take money from your wages
- take money from a bank account
- ask bailiffs to take and sell goods to repay the money
- secure the debt on your property – this is called a ‘charging order’. For CCJs issued after 1 October 2012, creditors can do this even if you haven’t missed a payment under the CCJ. If the creditor has a charging order, as a last resort, the court can make an order for the sale of your property
- the creditor may ask you to provide information, under oath, about your financial circumstances
- creditors could try to make you bankrupt if you owe them more than £5,000 which could have a serious effect on you, for example, if you own your home.
Don’t ignore any court forms or letters from a court
If you receive any forms, notices or letters from a Magistrates’, County Court or High Court, for example, a statutory demand, please contact your adviser immediately as there could be a time limit ivolved.
Bailiffs
Dealing with a letter saying bailiffs will visit
If you haven’t paid a debt you might be sent a letter from bailiffs (also called ‘enforcement agents’) saying they will visit your home to collect payment.
Don’t ignore the letter – this is called a ‘notice of enforcement’. If you do the bailiffs can visit your home after 7 days. As well as collecting payment for the debt they can charge you fees so you could end up owing more money.
There are things you can do to stop them coming if you act quickly.
Before you speak to bailiffs, check the extra rules they should follow if you:
- are disabled or seriously ill
- are vulnerable because of covid
- have mental health problems
- have children or are pregnant
- are under 18 or over 65
- don’t speak or read English well
- are in a stressful situation like recent bereavement or unemployment
You might be able to get more time to deal with the notice of enforcement.
Check if bailiffs can take property from your home
If you let bailiffs into your home, they can take your property.
If you don’t let them in, they can still:
- take your things from a road – like your car
- talk to you
- collect money
- give you documents
You don’t have to let bailiffs into your home. They can’t force their way in, but they can come in if you’ve left a door unlocked.
If bailiffs didn’t follow the rules, you can check how to complain about bailiffs here.
Stopping bailiffs at your door
Bailiffs (also called ‘enforcement agents’) visiting your home can be a stressful experience but you have rights and you shouldn’t be bullied.
Bailiffs are only allowed to try to come into your home between 6am and 9pm.
You shouldn’t let a bailiff into your home – it’s always best to try to sort out your debt by keeping them outside and speaking through the door or over the phone.
Make sure your doors are locked – bailiffs are allowed to come in through unlocked doors. If you have a porch with a lockable door you should lock this too.
Depending on the kind of debt you owe, the bailiff will sometimes have the right to force entry by asking a locksmith to open your door if you won’t let them in. This can include bailiffs collecting unpaid magistrates court fines and bailiffs collecting tax debts for HMRC. Bailiffs collecting council tax or CCJ debts can’t force entry unless you’ve previously let them in, and you’ve then broken a signed controlled goods agreement.
It’s very unlikely they’ll do this – you should still have the chance to pay without them coming in.
Bailiffs can clamp and/or remove your vehicle, if it’s parked on your drive or on the street or a car park. You can protect your vehicle by parking it in a locked garage. You can also move it to a friend or family member’s driveway, if you have their permission.
There are some situations where bailiffs can’t take your vehicle, including:
- if it’s displaying a valid blue badge or it’s a Motability vehicle
- you need it work and it’s worth less than £1,350
- it’s also your main home – e.g. a campervan.
Call 999 if you’re being physically threatened by a bailiff – don’t let them into your home.
Making the most of your money
Tips on how you can increase your income and reduce your spending.
Ways you can increase your income | Useful Links |
Check you’re claiming all the benefits and tax credits you’re entitled to | |
Check whether you’re able to claim disability or ill health benefits | |
Check whether you’re able to apply for a grant from a charity or benevolent fund | |
Check whether you can get a tax refund or claim any tax allowances | |
Find out how to go about claiming child maintenance | |
Check to see if you can get any help with school costs? | – apply for free school meals and clothing vouchers |
Can you sell items you own? You could use websites like eBay, Gumtree or Cex ? Try to shop around to make sure you achieve the best price possible. | |
Can you find a job or increase your hours? Estimate your tax to find out how your income could change and check how this change will affect any benefits you receive | |
If you’re over the age of 55 you could access your pension pot. You should get independent information and advice before taking any money from your pension pot. Free independent guidance is available from Pension Wise | (for independent information about when you can access your pot, your options available and how this could affect you) (free guidance) |
Could you rent out a spare room to a lodger? Consider how this could affect you first. | |
Are you eligible for help with savings if you’re on a low income? | |
Can you claim compensation for an injury? Do you have any other possible claims? Are you about to receive payments from a redundancy or backdated benefit? | If you’re not sure, please talk to your adviser |
Can those who are staying with you help by contributing to your bills?
Cutting down on your bills and spending
Ways you can reduce your spending:
- Can you cut down your mortgage costs click here
- Can you reduce your rent costs? Click here. This includes help from your local authority’s Discretionary Housing Payment scheme click here
- Are you able to access help with your council tax bill that could either reduce the bill or help you to pay this? Click here. Ask your adviser for more information. Click here.
- You can ask your local authority to spread the cost of your council tax over 12 months instead of 10 click here or click here to find your local council.
- Are you paying the best rate? Could you claim any grants or discounts? Click here.
- Can you use less energy click here or make your home more energy efficient? Click here.
- Are you entitled to receive extra support from your energy supplier? Click here.
- Check to see if you can save money changing to a water meter. Also check for other ways of reducing your water costs.
- Water meter calculator
- Help with paying your water bill
- All about water meters
- Difficulty paying your bill
- Shop around for the best insurance deals for all of your insurance; including your house (building and contents), life, car, travel and health. Click here.
- Review your policies to see if you still need them or check whether they provide more cover than you need
Consider whether you can switch your telephone, TV, internet or mobile provider for a better deal? Click here. There’s information on the money saving expert website too. Click here.
- Check whether you can get help with travel costs for NHS treatment. Click here.
- If you travel by train, can you get a railcard click here or a refund for a cancelled or late train? Click here.
- Can you split your train ticket to save money? Click here.
- There may be ways you can reduce the cost of travel if you’re disabled. Click here.
- Look for other ways to reduce your travel costs click here, like searching locally for cheap fuel, use bus passes or travel cards, travel off peak, car share, or travel by bicycle or walk. Click here.
- See whether you can get help with health costs; like prescription costs, dental treatments and sight tests. Click here.
- Check if you can get free vouchers every week to spend on milk, formula, fresh or frozen fruit and vegetables. Click here.
Use budgeting tools, planners and guides, including calculators that help you plan for life changes, such as saving, planning for a baby or retirement, or planning for Christmas.
Useful links:
Work out your budget
Budgeting & managing money
Budget planning
Tools & calculators
There’s also information about shopping smarter, cutting costs and using life hacks to save money
There are lots of other tips on saving money such as; buying own brands in the supermarket, entertain at home, cook rather than take away plus more, on these independent websites. There’s also lots of information available to help you keep track of
your money, shop around, pay less and get help if things go wrong.
The web links here to are all free sources of information:
Money advice
Money saving expert
Which money advice
Citizens Advice
Consumer advice