• Listing my debts
  
  The starting point for understanding your financial situation is to make a simple list of all the debts you have.  In this list you should include:
  
  • The people or companies you owe money to (your creditors) and the amounts you owe them
  • Any reference numbers associated with the debts
  • Copies of any agreements or contracts you may have signed with each creditor

For some basic information on finance and budgeting you might like to visit http://www.moneybasics.co.uk/

• Prioritising my debts
  
  Having now made a list of your creditors, you need to begin putting these into a logical order to determine who you should pay first.
   
  This may vary from person to person depending upon your own lifestyle, however, the list below is a sensible start in terms of outlining those debts which should be placed towards the top of your list:
  
  • Mortgage/rent arrears
  • Utilities bills
  • Council Tax/Income tax /VAT arrears
  • Maintenance payments to ex-partner’s or children
  • Legal/Court fines

Give some real thought to the how you prioritise your debts and remember that at some point you may be forced to explain as to why you have prioritised them in such a way.

• Working out a personal budget
  
  Having prioritised your debts you now need to compare this against your household income.  Try to do this on a monthly basis, but if your income varies from month to month, then produce an average monthly figure from which to work
  
  You can find a useful budget calculator at http://www.moneymadeclear.fsa.gov.uk/
  
  and
  
  a budget sheet can also be downloaded from http://www.adviceguide.org.uk/index/life/debt/debt_fact_sheet_index.htm
  
  Once you calculated your budget, it should be much clearer as to what available money you have to pay off your debts. For further information on budgeting and prioritising your debts, you might want to visit moneybasics at http://www.moneybasics.co.uk/