1. ITV Report

Dealing with debts: Some useful advice

A poster advertising a payday loan "half-price sale" Photo: John Giles/PA

The Office of Fair Trading has estimated that the payday loan market was worth up to £2.2 billion in 2011/12, which corresponds to between 7.4 and 8.2 million new loans.

The Citizens Advice Bureau offers the following tips for dealing with debt problems.

Work out how much you owe

  • First, make a list of all your creditors so you can see how much you owe.
  • You will need to collect the following information for each debt: the name and address of the creditor, the account or reference number and a copy of the original loan agreement you signed

Prioritise your debts

  • Some debts have more serious consequences if they are not paid for than others.
  • Priority debts include mortgage or rent arrears, gas and electricity arrears, council tax, court fines and child maintenance payments.
  • Non-priority debts include benefit overpayments, credit debts, water charges, student loans and money borrowed from friends or family.
It is important to work out out your budget when dealing with debts Credit: Press Association

Work out your budget

  • List all the income for your household including net wages or salaries .
  • If the amounts are different each month, average them over three or six months.
  • Include any benefits you receive such as Child Benefit and tax credits, child maintenance payment benefits, contributions from other members of your family or lodgers.

What next?

  • Contact your creditors and make arrangements to pay back what you owe.
  • Sort out priority debts before coming to any arrangement with non-priority creditors.
  • You can ask non-priority creditors if they can freeze the interest on your debts while you deal with them.
  • Make a note of all telephone calls or meetings.

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