Cost of living: dealing with your debts (Scotland)
Work out your budget
Filling in your budget is the starting point for dealing with your debts. We know that when you are struggling with debt, the thought of writing down your income and outgoings might feel like the last thing you want to do. But doing a budget might be easier than you think.
Use our Digital Advice Tool to complete your budget and get instant tailored advice.
You won't be able to choose a solution to deal with your debts without a budget.
Your budget will show how much money is left over after you have paid for all of your essential costs of living, such as your mortgage or rent, gas and electricity, and food. It doesn’t include payments towards arrears on bills or credit debts.
See Cost of living: Making the most of your money for ways of cutting your costs.
If you have enough money left over to pay your debts
If you have enough money left over to meet the minimum payments on your debts and haven’t defaulted on these, you won’t need debt solutions yet. If you feel like you are struggling though, speak to MoneyHelper or contact us for advice.
If the money left over won’t cover the payments on your debts
If you have money left over, but not enough to afford what you’re being asked to pay on your debts, different debt solutions can help depending on your circumstances. Use our Digital Advice Tool to work out which solutions could help or see our Ways to clear your debt fact sheet.
If you have more money going out than coming in before paying your debts
You may find that you haven’t got enough money to cover your essential costs, this is called a deficit budget. Unless you are close to breaking even, many debt solutions are not going to help as you are getting further into debt all the time.
For example, if you make yourself bankrupt, most debts can be included and be written off. But you will still need to pay ongoing costs of living like your gas and electricity. If you can’t afford to pay these, debt is going to start building up again.
It may be better to wait until you can get closer to balancing your budget instead, so you get a fresh start when your debts are written off. You are still allowed to apply though. If you are thinking about doing this, contact us for advice.
For advice about managing a deficit budget, see Cost of living: if you can’t afford all your essential costs.
Help with credit debt
The Financial Services Authority (FCA) have issued guidance so lenders help customers who are struggling with repayments to credit debts such as credit cards, loans, overdrafts and catalogues.
Your options could include:
- making reduced payments for a temporary period;
- changing your loan term to make your payments more affordable; or
- making no payments for a temporary period.
Contact us as soon as possible if you’re finding it difficult to make repayments. We'll be able to work out affordable repayments to your lenders.
If you make an arrangement with your lender, this will be reflected on your credit file. But this would also happen if you miss payments.