Dealing with debt

Most students leave university with a debt. It's not always a bad thing if it's just a student loan but debts can quickly add up.  Most debt problems can be resolved if dealt with in time. Taking a series of simple steps can help you get your finances under control and get you back on the right track. Don’t wait – take action now.

• Step 1: Work out a budget
• Step 2: Talk to your creditors

1: Work out a budget

If you haven’t already worked out a budget, then this is the first crucial step towards getting back on track.  

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 - the possibilities are endless, but you may have to make some sacrifices.

Use our online budget calculator to make a budget now.

If your budget calculates in the black (ie in credit), use any surplus towards paying off your debts. Don't borrow money to pay off your bills without thinking it through very carefully. Is an interest-free overdraft an option? Always get advice first. 

Once you've made your budget show it to your creditors straight away. Make sure that you contact all of your creditors.

2: 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. Act early to avoid interest or charges building up.

Then, 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 small amount you can realistically afford rather than a larger offer 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 creditors are difficult. 

Deal with priority debts first. These include your living costs: your rent/mortgage, 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 - although not paying them could result in County Court judgements. 

• Rent/mortgages
  • You can request a mortgage holiday with your bank and ask them for a month when you don't pay.
  • Talk to your landlord and suggest giving them a post-dated cheque for when funding/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 them informed if there will be a delay in getting payment.
  • Southern Water Trust Fund might be able to help you with your water bill from Southern Water. More information is available at: www.southernwater.co.uk
• 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 us.
• 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 direct.

Our Student Service advisers will be able to advise you on all possible options. Contact us without delay.