If you are having problems with debts then it can be all too easy to get stuck in a rut and not do anything about it. After all, all the advice you read tells you to make a start by working out what you owe so that you can find out if you have a real problem – but, you already actually know that you have a problem. This is, after all, why you’re so worried about your debts in the first place!

Fact is, however, a lot of people actually make their situations far worse by ignoring them. They simply believe that looking at their financial situation is pointless because they already know that something is wrong and working out exactly how wrong things are won’t fix them.

This ‘head in the sand’ approach won’t actually get you anywhere…..except further into debt. It is absolutely vital to take back control in this kind of situation to:

• Stop things from getting worse
  
  
• Work out what you need to do to make them better
  
  

If you don’t take action when you realise that there is a problem then you will, quite simply, never come up with a solution. And, your situation will simply carry on getting worse. This could lead to all kinds of issues from creditors chasing you, black marks on your credit record through to the actual loss of your home if you cannot afford to pay your mortgage or your rent.

So, taking action here may not be a ‘nice’ thing to do and it may give you a shock when you work out how your finances stand but it’s the first step to working out how to improve your situation. Your first task, therefore, is to:

• Work out exactly what you owe and to whom you owe it.
  
  
• Work out how problematic your debts are (i.e. are you simply struggling to manage your minimum repayments but can still make them or are you in arrears and juggling debts/credit products just to get by every month).
  
  

You should also do a budget while you are at it to assess how much of your income you can actually spare to repay your debts. So, work out:

• How much you have coming in every month (i.e. salary, benefits and all other income).
  
  
• How much you have to spend every month (i.e. on essential payments such as your mortgage, utility bills, council tax and living expenses such as food etc).
  
  

The money you have left over is basically what you can afford to spend to repay your debts. If this analysis shows you that you don’t have enough spare cash to pay off what you owe then you will need to get advice. The point here is that you cannot know this for a fact until you do the debt management analysis in the first place. If you are unsure what steps to take next then you can get free and confidential advice from the Citizens Advice Bureau (www.adviceguide.org.uk) or the Consumer Credit Counselling Service (www.cccs.co.uk).