From the Teacher Support Network, www.teachersupport.info.

DEALING WITH DEBT
If you feel you are able to cope here are some tips to make things more manageable

If you do find yourself in debt you should consider whether you are able to cope on your own or whether you may need to consider an Individual Voluntary Arrangement (IVA) or bankruptcy.

Transferring balances on your credit cards - You might be able to pay off your debt more quickly by transferring credit card balances onto ones with low rates, such as limited period concessionary offers. Remember to check the terms and conditions as new purchases may be charged at the standard rate of interest and not the concessionary rate charged on the transferred balance.

Rank your non-priority debts – This includes things such as credit cards, bank overdrafts, car loans, catalogues, etc and should be ranked in order of interest rate. Then concentrate on clearing those with the highest rates of interest first. You can find more information on what are considered priority debts, here.

Beware of extending your borrowing - Think very carefully before borrowing to pay off existing debts. It's easy to get caught in a cycle of borrowing. A consolidation loan may reduce your monthly outgoings and a cheap one might be a sensible option. However, be sure that it will release enough income to solve your current problems. Otherwise you may find you have increased your total indebtedness, but you are still overstretched and have to borrow even more in future.

If your debts are large and it would take you a very long time to clear them by offering reduced payments to your creditors, or if you have large debts, no assets of any value and no long-term prospect of repaying your debts, bankruptcy or an IVA may be appropriate.