How to Deal With Debt: The Do’s and Don’ts

Upset Woman Glaring At Her Many Credit Cards.
Debt can be a cause of stress (Getty Images)

Glasgow-based Stuart Carmichael, chief executive of the debt advice charity, which has helped more than 6,000 people facing financial woes offers some thoughts on how to deal with debt.

Don’t ignore the letters & calls:

The worst scenario, but often the first course of action, according to Stuart, is to ignore the debt problem and pretend it doesn’t exist.

When the creditors who are owed money don’t hear from you they start an escalation process which can result in debt collectors get involved.

Stuart added: “Most creditors will be understanding if you have a financial issue and will help you with an affordable payment plan.”

Don’t turn to payday lenders:

Increasingly, people in desperate financial predicaments are turning to payday lenders.

This will resolve the immediate money worry but come the next payday the repayment will be due and financially you will be worse off.

Stuart advised: “There’s a risk that payday loans will spiral and get out of control – so if possible avoid or be very cautious because of the high interest rates.”

Don’t stress or panic:

Worrying about debt only makes the situation worse.

It’s understandable that people feel frightened about the prospect of being unable to repay debts but that won’t help resolve the problem.

Stuart said: “The best option is to sit down with a pen and paper, write in one column the money received each month and in the other the monthly household expenditure.

Remember to include money received from part time employment, child and working tax credits and any other benefits.

By subtracting the total expenditure from the income, what is left is defined as the disposable income which you can afford to pay towards debts.

If it’s impossible to pay the contractual payments to the debts from the disposable income, then it’s time to seek help from a registered debt advice charity.”

Don’t over-stretch:

Often creditors will agree to a payment arrangement to repay outstanding debts.

This should be an affordable amount which you can pay each month.

But Stuart emphasised: “You must make these agreed reduced payments on time otherwise the creditor could take further action.

This is why it’s imperative that the monthly arrangement you agree to is affordable.

You can complete an income and expenditure plan to understand if the payments will be affordable.”

Don’t rob Peter to Pay Paul:

Borrowing more money to repay existing debt is not recommended according to Stuart who added: “If there’s a debt problem which requires a solution then borrowing money will only delay the inevitable and it can feel like ‘jumping out the frying pan and into the fire’.”

Don’t keep it to yourself:

As our grannies would say, a problem shared is a problem halved and it’s certainly true for people in debt.

Stuart said: “Confiding in somebody else about your money worries is a good start to getting the problem under control. You can talk to friends, family or work colleagues that you trust.

You can also seek confidential advice from a registered charity.”

Stuart Carmichael is from The Debt Support Trust ( and his team of advisors can be reached on 0800 085 0226.