Don't borrow money to pay off your debts without thinking carefully. Get advice first. You should be particularly wary of taking out a loan secured on your house to consolidate the debts you already have. If you turn unsecured loans into a mortgage you could lose your house if you don't keep up the payments.

Consolidation loans mean borrowing more money, over a longer period and will mean more interest to pay. This could make your situation worse in the long run.

It won't go away and the longer you leave it, the worse it gets.

Get in touch with your creditors straight away and explain your difficulties.

Explain your situation in writing and back it up with a detailed personal budget outlining your income and outgoings and showing your creditors how much you can afford to pay them every month.

Contact everyone you owe money to. If you make arrangements to pay some creditors but not others, you could run into difficulties again.

If the first person you deal with is unhelpful, ask to speak to someone more senior who may be able to agree to your offer of payment.

Make sure you tackle your priority debts first.

Priority debts are those that could lead to you losing your home, being evicted, having your gas or electricity cut off, or lead to fines.

This means you should make sure you have made arrangements to pay your essential household bills such as your mortgage or rent, loans secured on your home, council tax and utilities before making offers to pay unsecured credit debts.

Make sure you are claiming all the benefits you are able to: Could you claim Tax Credits? Are you sick or have a disability?

CHECKING YOUR BENEFITS Contact your council to see if it has a welfare rights office Local law centres often offer benefits advice (see Lawcentres link on right) If you are over 60, contact your local Help the Aged, Pension Service or Age Concern office Age Concern's information line: 0800 00 99 66; Help the Aged's Seniorline: 0808 800 6565; (0808 808 7575 Northern Ireland); The Pension Service's website or Department for Work and Pensions website Tax credits are administered by the Inland Revenue: 0845 300 3900 (Great Britain); 0845 603 2000 (Northern Ireland) British Gas Warm-a-life scheme offers benefit checks and energy saving tips free of charge to people living in privately owned or privately rented houses in receipt of income related benefits (not just British Gas customers): 0845 605 2535 Locate a local advice service in your area through Advice UK website or the Community Legal Service website (CLS Direct - see link on right)

If you are on a low income you may be able to claim a rebate on your rent and council tax. Contact an independent welfare rights agency for advice and a benefits check(see information box for more details). If you have lost your job, or are off work because of illness, check whether your payments were covered by payment protection insurance. Contact the credit company if you are not sure.

Make sure all adults in your household are contributing to the household bills. Check with the Inland Revenue that your tax code is correct for your circumstances. You may also be able to save money by switching to better deals on a range of goods and services.
 

Be very careful before entering into any sort of debt management programme with a company that will charge you for sorting out your debts.

Free debt management plans are available which means that all the money you can afford to pay goes on paying your debts back instead of on monthly fees.

Contact National Debtline on 0808 808 4000 for more help. We are a free service.

You can also go and see a local advice agency such as a Citizens Advice Bureau or one of Advice UK's money advice centres. Visit their websites for more details about how to contact local offices (see website links on right).