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Tackling your debts

How do you figure out how much I can pay towards my debts?

Posted 27 March 2013

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The Debt Advisory Centre Scotland will look at your budget in order to decide which debt solution is best for you - and how much you can afford to pay towards your debts each month.

Deciding that you need professional help with your debts is the first step towards addressing your debt issues.

However, the idea of 'handing over' your finances to a debt professional, who will calculate your new debt repayments, can be a bit daunting. What if they try to make you pay more than you can afford? This guide is designed to explain the process and reassure you.

How are my debt solution payments calculated?


When you contact the Debt Advisory Centre Scotland, we will look over your budget with you to decide how much you can comfortably afford to pay towards your debts.

We will look at how much you earn each month - including your pay, any benefits you receive and income from other sources.

We'll then look over things like your bills and bank statements with you to see how much you spend each month on your essentials. These are things that absolutely have to be paid for each month - and take priority over debts like credit cards, personal loans etc. Common priority costs include your mortgage/rent, food, transport, bills and Council Tax.

Find out more about saving money on your utility bills with our Utility Bills Guide.

Whatever is left over after your essential costs are subtracted from what you earn is your 'disposable income'. In theory, you can spend this however you like. We'll work out how much you can realistically afford to pay towards your debts out of this figure. That means that you will be able to make payments towards your debts and keep up with your priority costs too.

What happens to my payments if my circumstances change?


If your circumstances change during your debt solution, and you find you can't afford the payments, you should inform us as soon as possible. We may be able to change the terms of your solution. For example, we may be able to negotiate lower payments with your lenders, or ask for a payment break.

On the other hand, we may be able to move you onto a different debt solution if it looks like it's right for you.

Find out more about the different debt solutions here.

by Shelley Bowers

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.