Dealing with debt

Work out a budget

If you haven't already worked out a budget, then this is the first crucial step towards minimising your debt. You can use an online budget calculator to create a budget.

While you're making your budget, consider how you can realistically:

• Increase your income - can you get a part-time job or apply for a grant?
• Decrease your expenditure - you may have to make some sacrifices.

If you are in credit, use any surplus towards paying off your debts.

Talk to your creditors

If you are having difficulties paying your bills then contact your bank to see if it might be possible to work something out.

Based on your budget, work out a reasonable offer to each creditor. Don't worry if the offer seems small – it's better to offer a regular amount you can realistically afford rather than to make a larger offer that you won't be able to keep paying.

Never ignore letters from your creditors
Open them and respond, even if this is to explain why you cannot afford repayments – ignoring letters won't make the problem go away. Don't give up trying to agree an offer even if your creditors are difficult.

Deal with priority debts first
These include your living costs: your rent, council tax and gas and electricity. The consequences of not paying these could be serious.

Then try to renegotiate your non-priority debts
These are debts with lower enforcement actions - store cards, unsecured bank loans, credit cards. Not paying them could result in County Court judgements.

After you graduate

When you graduate your student account is usually turned into a graduate account – the terms of your account will change and you may find that you no longer have access to free overdraft or other special rates.

However banks are keen to keep your custom and are likely to offer you new deals – see moneyadviceservice.org.uk for more information.

Renegotiating your debt

You may find there are ways to deal with specific types of debt.

Rent

• Talk to your landlord and suggest giving them a post-dated cheque for when your funding comes through or your wages are paid.
• Pay what you can up front with the remainder to follow.

Utility bills

• Contact the utility company and negotiate a payment plan with them.
• Pay what you can up front with the remainder to follow.
• Keep your provider informed if there will be a delay in getting payment.
• Southern Water has ways of helping you with your water bill from Southern Water.

University fees

• Contact the finance department directly – you may be able to negotiate a payment plan.
• If you have not applied for a tuition fee loan and you are eligible, contact student services.

Council Tax debt

• If you are liable to pay Council Tax and you are in arrears with your payments, liaise with the Council Tax department directly.

Debt specialists

• Contact details of debt specialists can be found in the Finance and Funding section of our list of useful contacts (pdf).