Ask the expert: Credit-card debt

This week's expert is Meg Van Rooyen of National Debtline

BBC News Ask the Expert column gives readers a chance to get their financial questions answered by experts.

This week, Meg Van Rooyen of National Debtline, a free telephone helpline for people with debt problems, helps reader Charlotte Banks.

Ms Banks is struggling to pay back almost £10,000 she owes on credit cards. Debt collectors are now involved in recovering part of the debt, and she is worried about court action.

She has opened another bank account to ensure she has enough money to live off, but she is still struggling to pay back the money she owes.

Ms Van Rooyen writes:

It is important that you start by looking at your debt situation as a whole.

There is no point making arrangements to pay one of your creditors without dealing with all the other debts you have too.

We would suggest you start by working out a personal budget.

This should list your monthly income from all sources and the ordinary essential monthly outgoings you need to pay to keep the roof over your head.

DO YOU HAVE A QUESTION? Send your questions to our experts

These include mortgage or rent, fuel, council tax, water, telephone, TV licence, insurance, housekeeping, clothes, travel and son on.

Do not include the payments you are supposed to make on any unsecured credit such as personal loans, overdrafts and credit cards at this stage.

The aim of the personal budget is to see what you have left over after all your essential outgoings have been met.

This figure represents the available income that you can realistically afford to use to pay your unsecured creditors.

Making an offer

You can then work out how much to offer to pay each of your creditors on a monthly basis so they each get a share of your available income. The fairest way of doing this is to make offers on a pro rata basis.

FREE DEBT ADVICE National Debtline (0808 808 4000): Free confidential helpline to those in debt Consumer Credit Counselling Service (0800 1381111): The service offers free advice and information to those affected by debt Citizens Advice: You can find out details of your local CAB by using the website's online directory (see link on right) or by looking up its local offices in your telephone directory Full list of debt contacts

You can either make offers to your creditors yourself by writing to them with a copy of your personal budget.

Alternatively you may be able to get a free debt management plan which enables you to make one payment a month which is divided up amongst your creditors for you.

Make sure you pay all your essential outgoings first, and avoid any debt management company that charges you fees to set up a debt management plan.

You cannot force a creditor to accept an offer of payment. But if they can see that you have worked out a reasonable budget plan, and each creditor is getting a fair share of the money available, they are likely to accept.

Ask them to freeze any interest to stop the debt growing even bigger.

Court action

If the creditor takes you to county court, you can offer to pay the debt off - in instalments you can afford - by filling in the forms the court will send you.

All creditors and debt collection agencies have to follow the Office of Fair Trading (OFT) debt collection guidance.

This includes "putting pressure on debtors or third parties is considered to be oppressive."

You can complain to the debt collection agency and your local trading standards department and to the OFT. The guidance is on the OFT's website.

You have done the right thing in moving your wages into a new bank account.

This means you have control over your finances.

It is a good idea to choose an "instant access" type account with no overdraft or cheque facility. A list of these can be found on the Financial Services Authority website. The overdraft can be included with your other credit debts when offers of payment are made.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.