If you’re struggling to keep up with your payments, but want to prevent a visit from the bailiffs, check out our top tips for managing debt before it escalates.

 Make a budget and cut costs

Whether you’ve missed one or two payments or you’re finding it more difficult to cover all your bills each month, looking at your budget and finding ways to cut back can help you get back on top of your debt before it escalates.

If you don’t already have a budget in place, start by making a list of all your incomings and essential outgoings such as your rent or mortgage, utility bills, and council tax. The remaining amount is your disposable income and the funds you could potentially put towards paying off your debts.

Look for areas where you can cut back on non-essential spending and double-check that you’re not paying for any subscriptions you don’t need or no longer use. The more you can save each month, the more easily you’ll be able to manage your debts.

Deal with priority debts first

When managing increased living costs and controlling your spending, it’s important to focus on your priority debts first. These are the debts that could have a severe impact on your quality of life if they go unpaid. You might find yourself at risk of losing your home, having your electricity cut off, or facing prosecution if you fail to pay these bills. Typically, your priority debts will include your monthly rent or mortgage payment, gas and electricity bills, Council Tax, and any court fines. If possible, these debts should always be paid before you start tackling other types of debt.

Ask to make lower repayments

While trying to negotiate with your creditors might seem nerve-wracking at first, you might be surprised at the concessions they’ll be willing to make to help you get on track with your debts.

If you’re struggling to pay your non-priority debts like a credit card bill, payday loan, overdraft, or catalogue debt, contact your creditors and explain your situation. It’s best to do this via letter or over email as you’ll then have a written record of your conversation.

Remember that your creditors don’t want you to fall behind with your payments or be forced to employ bailiffs to help recover the debt. Instead, ask them whether they might consider pausing your payments for a set period, not adding extra interest or charges, or extending the loan term to lower your monthly repayments. The worst thing they can say is no, but they will likely be happy to work with you to find a way forward that works for both parties.

Check your claims

To prevent a bailiff visit and manage your debt before it escalates, it’s worth finding out whether you might be eligible for any additional support.

Depending on your circumstances, you might qualify for Government benefits that you’re not currently claiming. There are also several grants available – including some that are specifically designed to help people pay their utility bills – that could help you make payments on your priority debts if you’re starting to fall behind.

The Government can also sometimes issue interest-free loans to eligible applicants. Speak to a debt advisor or your local Citizens’ Advice Bureau to find out where you stand.

Switch your debts

If you’re worried about being able to manage your debt because your employment situation has changed or your living costs have increased, you might be able to switch your debts to a provider offering lower repayments or a better interest rate. This might only be an option for you if you have a good or excellent credit score and haven’t yet missed any debt repayments.

With a strong credit score, you could find that you’re eligible to switch to a balance transfer credit card with a low or 0% interest rate or to refinance your personal loan. Even so, remember that if you switch to a loan with lower repayments but a longer loan term, you could end up paying more overall due to the extra interest charged.

 Seek help

One of the most proactive steps you can take to manage your debts and prevent bailiff visits is to seek help as soon you start struggling with payments. The earlier you can find debt advice, the more time you’ll have to negotiate with your creditors, implement a workable budget, or enter a debt management solution such as a debt management plan (DMP) or individual voluntary arrangement (IVA), if needed. A specialist debt advisor will be able to assess your situation and offer tailored advice to help you find the right solution for you.

Apply for Breathing Space

A debt advisor can also help you apply for Breathing Space. This is a government-backed programme that provides temporary protection from your creditors, giving you the time you need to get back on track with your debt management. You can enter Breathing Space once in any 12-month period and will have 60 days without having to worry about being chased by your creditors or facing spiralling interest and charges. You’ll still need to make your normal repayments, but you can use Breathing Space to put steps in place that could make managing your debts easier in the future.

Facing a visit from the bailiffs? Our team of experts is here to help. Give us a call on 0161 413 2672 or send a message here