10 secrets to demolishing debt

Don't let debt ruin your life. Use these fantastic tips to start you off on the path towards a debt-free life

Know the worst!

Open all bank statements and bills. List all your debts, large and small, this might seem scarey, but you will feel empowered by finally addressing the situation.

Keep a record of what you spend

And where you spend it. Knowing how you spend your money will help you control your spending. Try carrying a notebook with you for three months and record all items of expenditure, however small!

List your monthly/weekly income and expenditure

Can you make any realistic cutbacks to increase the money available for creditors?

Some debts are more important than others

Work out which are priority debts eg mortgage, rent, utilities, council tax, income tax, fines and maintenance, and which are non-priority debts such as credit cards, store cards and catalogues.

Consider what offer of payment you can make

For priority debts, try to offer the current charge plus something towards the arrears. For non-priority debts, offer what you can, even if it's £1 per month, until your circumstances improve.

Write to your creditors explaining your position

Send them a copy of your income and expenditure form. Ask if they will agree to accept the offer of payment and freeze the interest.

Tackle credit and store cards

After priority debts, if you have enough money spare, snowball those cards. The idea is to pay off your higher interest cards first; pay the minimum on all your cards, but use any extra income to whittle down the debt on your highest interest card; put all you have into paying that card off. Once the debt has been dealt with completely, move on to paying off the card with the next highest interest rate. Soon the house of cards will come crashing down.

Rediscover cash

Especially if you find it hard to keep track of your spending when using credit or debit cards. If necessary, withdraw your budgeted amount of cash for the week at the beginning of the week and resolve to just using that.

Don't be tempted to transfer all your debts into 'one easy monthly payment' secured on your house

If you fail to keep up with payments, you risk losing your home.

Don't despair!

With help you can get through this. Consider making an appointment to see a free debt advisor. They will not judge you.