Dealing with debt

When you’re paying money back, work out what to pay and in what order:

• Who will do most damage (charge most interest)? 
• What’s a priority debt/lesser priority?
• Is it possible to get any of your payments cut down a little so you can afford to pay them?
• If you can’t afford to pay everyone, look at who will wait to get their money. So, for example, you might pay rent arrears before paying a loan.
• Once you know how much you have left after you pay off all the things you need to pay for, you can decide who gets what.
• For example, you could pay each of them a token payment each month until you get back on your feet, if you have the money to do that. Or you may need to get them all to accept a new reduced payment that you can afford to pay over a longer period.
• If you can, at least make a minimum payment, until you can get free advice from a money adviser (like Citizens Advice at the link below). A money adviser will help you sort everything out and may be able to put a hold on things to help you get sorted.
• If you do manage to get a payment reduced, could you put a little of the money you’ve saved away? Say into a credit union?

Useful links

• Take a look at our Budget and debt planner on our main website. This is a help guide to help you to do a weekly budget which you can use when contacting your creditors.
• Money Advice Scotland has a helpline and webchat service where you can ask for advice on money or debt.
• You can phone Citizens Advice Scotland’s Money Talk Team or find information on its website for help if you’re struggling to make your money last or dealing with debt.
• Scotland Debt Solutions has a free advice phoneline and webchat for anyone with debts of over £5,000.
• The Money Advice Service has advice to help you take control of debt and find out how to borrow affordably.
• The Mental Health and Money Advice Service Debt Health Check can give you tips on how to deal with debt if you fill in a short questionnaire about your situation.
• MoneyAware has articles with advice on living with debt.
• National DebtLine can give you advice online, webchat or by phone on 0808 808 4000.
• If you’re in debt as a result of gambling, Scotland Debt Solutions has advice on how to write off gambling debt. You might also find it helpful to read this NHS Inform page about problem gambling. The GamCare self-assessment tool can help you see how gambling is affecting your life and what you can do about this.

When you’re really worried about something, it’s tempting to ignore it and hope it will go away. It rarely does.

• Try to think about what will make you feel better. Is there something that would take away some of the worry?
• Knowing as much as you can about your situation, and making a plan about what to do can help you feel less worried.
• Is there anything that you need to find out, or know more about? Having information and facts can make you feel more in control. 
• Who could you speak to? You’re not alone. Lots of other single parents are going through the same thing. It’s not something to be ashamed of. You can get on top of whatever is going on.
• Speaking to other parents is great but it’s a better idea to talk to a money adviser who can look at things objectively and who is trained to help you get the best result for your circumstances. If you had toothache, you’d go to the dentist or if washing machine wasn’t working properly, you’d get a repair person out. So, if your finances aren’t working for you, ask for advice rather than thinking that you have to fix it all yourself. Our advisers can talk through your options with you on our Lone Parent Helpline and webchat. Just call 0808 801 0323.

Everyone borrows money (buys credit). A mortgage is credit.

• But shop around before you borrow anything because some deals are much better and safer than others. And there are different kinds of lenders too.
• Be very careful not to get involved with payday lenders or ‘loan sharks’ (illegal money lenders).
• Borrowing money off friends and family isn’t a great idea as it can cause problems if you can’t pay the money back and they need or want it back.
• If you’re shopping online be wary of ‘buy now, pay later’ deals which are often offered at the checkout. The terms may not be all that they seem. These sorts of loans affect your credit rating.
• Learn as much as you can about interest rates and how interest is charged before you sign on any dotted lines.
• Ask exactly how much any credit will cost in total. If they won’t tell you don’t use them. By law, a company has to tell you the total cost of credit. They often quote the terms of the credit as an example. But when you see exactly how much it’s going to cost you, it gives you a better idea, and you can then decide what’s best for you.
• Think about using a credit union for loans and savings. These are for everyone including those who can’t get ordinary bank products. There may be one in your area or workplace.
• Use your common sense. If anything seems too good to be true, it is. 
• If you desperately need money for essentials, remember there are trusted organisations that can advise you and tell you about grants and other crisis support. Our advisers can talk through your options with you on our Lone Parent Helpline and webchat. Just call 0808 801 0323.
• You can search for grants that are available to apply for in your area at Turn2Us.

Useful links

• The Money Advice Service has advice on other options you should look into instead of a payday loan. Payday loans can land you in more debt and affect your credit rating if you don’t pay the money back in time.
• This article from Money.co.uk explains why you should avoid payday loans.
• Citizens Advice Scotland has information on its website about money, budgeting, credit, debt, loans and savings.
• You can check your credit score for free by joining Credit Club. This is useful for checking what’s on your file, missed payments, if there are errors, and for improving your score. Monthly reports can alert you to fraud.
• If you owe money to a loan shark (an illegal money lender), you can report this in confidence to Trading Standards Scotland on 0800 074 0878, or online at www.tsscot.co.uk.
• Consumer Advice Scotland has useful information and a helpline service to help with consumer problems.