Debt action plan

If you are having money problems, you may be tempted to ignore them and hope they will go away. If you find you are always running out of money, missing loan repayments or relying on credit to pay for your day-to-day spending, tackle your situation as soon as possible, before you fall into more serious debt.

Remember that getting into debt and missing repayments can affect your credit history and make it difficult to get loans in the future. You can also be taken to court for defaulting on loan repayments.

Follow our step-by-step debt action plan to deal with your debts

Step 1: Make a list of all your current debts
Step 2: Make a new budget/check your entitlements
Step 3: Contact your lenders to discuss your options
Where can you go if you have serious debt problems?

Step 1: Make a list of all your current debts

• List your debts in order of priority, starting with your mortgage or rent, utility bills and any ongoing medical costs you have. You need to pay these first because you could be at risk of losing your home, being evicted, having your gas or electricity disconnected, or becoming ill.
• Then look at your other debts such as credit card debt, overdrafts and personal loans. List your debts in order of the highest annual percentage rate (APR). The highest APR loans should be paid after your mortgage or rent, utility bills and medical costs.

Step 2: Make a new budget/check your entitlements

• Work out how much you can afford to repay each week or month and learn how to spread your money to get more from it. Read our money makeover and budget planning section to help you.
• Make sure you are claiming all that you are entitled to. Depending on your income, circumstances and mortgage, you may be eligible for mortgage interest supplement, mortgage interest tax relief, other occupation related tax relief and more. The following sites are good starting points: Revenue, Department of Employment Affairs and Social Protection and Citizens Information.

Step 3: Contact your lenders to discuss your options

If you are worried about your loan repayments, contact your lender as soon as you can to explain your situation. Have all of your facts and figures to hand – including your list of debts, interest rates and how much you still owe on each.

• Outline to your lenders how much you can afford to repay each week or month using your budget.
• Discuss options your lender may allow including: debt consolidation, payment breaks, or extending the term of your loan. This will make your loan more expensive in the long term, but it will make things more manageable for you in the short term. Read up on the options, then contact your lender immediately.
• If you have a car bought under a hire purchase agreement, find out all your options.

Where can you go if you have serious debt problems?

The most important thing to remember is that there is help available to you.

The Money Advice and Budgeting Service (MABS) is funded by the Citizens Information Board and is a free, confidential and independent service for people in debt or in danger of getting into debt. MABS can help people to draw up realistic budgets and help them in liaising with their banks and building societies on their debt in order to come to a workable solution. You can telephone the MABS helpline on 0761 07 2000.

The Insolvency Service of Ireland (ISI) is an independent Government body. The aim of ISI is to help sort out personal debt problems and restore people from insolvency to solvency in a fair, transparent and equitable way. Their website, www.backontrack.ie, has information to help you get back on track financially, including information on qualified financial advisors who can help protect you from your creditors as well as tailored information for your personal situation. You can telephone the ISI helpline on 076 106 4200.

There are other organisations that can offer you support if you are in emotional distress, including the Samaritans.