Advice given on these pages does not necessarily reflect the opinions of London Lesbian and Gay Switchboard or any of its volunteers.

I’ve got too much debt and I’m finding it hard to make ends meet some months and find myself having to use my credit cards to get to the end of the month. I want to clear my debt fast!

OK – one of the fastest ways to go debt free is to go bankrupt, but that’s not the easiest option and you could loose your house, car and even stuff in your house like furniture. So, the next best option is to deal with your debts head on. Lets say that you receive a windfall of, say, £100 and decide to use it to reduce one of your debts. Which is the smart thing to do: pay £100 off the store card that charges 30% APR, or use it to pay £100 off your credit card that charges 12% APR? Obviously, the wise move is to pay off your most expensive debt first, because you pay less interest in the long run.

This is the principle behind snowballing, where you throw your spare cash at your most expensive debt first, then the second, then the third, and so on until all of your debts have been settled. Snowballing is probably the best way to tackle multiple debts. You might like to try and contact your creditors to see if they can reduce your payments, they might stop you using your cards but that’s a good thing. If you’re worried about calling them, write to them instead and give them details of your incoming and outgoings. Remember, credit card companies have to be sympathetic to people who genuinely want to pay their debts back and they should help you out.

I’ve left university and have over £15,000 worth of debt. My student loans, credit cards and overdrafts have all mounted up and I simply can’t afford to continue paying my debt off and trying to live. I’ve heard that an IVA can cut up to two thirds off you debt. What is an IVA?

An IVA is where you come to an agreement with your creditors about how to pay off the debts. It's done under the supervision of a licensed Insolvency Practitioner (usually an accountant or lawyer) who sorts it all out for you and, once in place, it has the force of law. If you’re having problems paying your creditors back and they are harassing you for money, once the IVA process has started your accountant will deal with all the hassle of responding to letters from your creditors and once the IVA is in place your creditors have to stop contacting you all together, if they don’t they’re actually breaking the law!

In short, you don’t pay anything up front for the accountant; if the IVA is accepted then the company who put the proposal together will take a cut of the money you pay into your IVA pot. You’ll draw up a list of all your expenses and give yourself a budget food, clothing, travel and normal every day expenses. Then you look at what’s left and that’s what you pay back each month to your creditors.

The problem with an IVA is that many last for 5 years and most of the time people fail them as if you start to earn more money that cash will go into your IVA pool. Also IVAs don’t make allowances for Christmas or unfortunate expenses like paying for your boiler to be fixed. BUT you do have some power. If you want your accountant to revalue what you should be paying based on bill increases or other issues that arise you can do so and hopefully the creditors will accept the new figure. After all they want as much money back as possible and if they force you into bankruptcy they won’t get a penny. If you are thinking of an IVA don’t get sucked into the ones advertised on TV and if a company asks you to pay upfront be wary and get advice from your local citizen’s advice bureau who will also help you find a licensed practitioner who can get your IVA up and running.

I keep getting bank charges applied to my bank account, and I’ve heard they’re unlawful and I can claim them back. If this is true my bank owes me about £400! Can you only claim back credit card charges or does it apply to bank accounts too?

The Office of Fair Trading recently passed a directive to credit card companies and banks telling them to decrease their penalty charges from anywhere between £20 - £35 down to £12. While the OFT still thinks this is too high they’ve set this limit so the banks won’t complain too much. It doesn’t matter if the charge was on a credit card or a bank account, the likelihood is you were charged for going over your overdraft and them paying direct debits etc when you didn’t have enough money in your account, this is credit! So the directive still applies.

If you’ve been charged bank charges you can claim them back for up to six years but the process can be long. I’ve done it myself and got back the full amount they owed in a matter of a couple of weeks, but I had to stick my feet firmly in the ground and use a few lines of legal jargon to scare the bank.

The Consumer Action Group (http://www.consumeractiongroup.co.uk/forum/) has prepared a number of documents for you to send to your bank and if you follow the instructions carefully you might find a nice surprise in your bank account. A word of warning though, if the bank gives you your money back they might ask you to sign a letter saying you won’t claim charges back again. Don’t sign it! Simply send it back with a polite letter saying you’re pleased with their decision to refund your charges but you won’t be bound by the terms of the letter. They won’t reply or take the money back. They can’t.

Some banks have gone a step further and closed down the accounts of people who ask for their money back, so it might be worthwhile opening another bank account. You might even get a better deal with your new bank. If you keep incurring bank charges though, you might need to look more closely at your spending!

This 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.

If you or anyone you know are affected by any of these issues, call London Lesbian and Gay Switchboard on 020 7837 7324 or the text phone service 020 7689 8501. From coming out to going out, sexual health to mental health, relationship traumas to falling in love, via homophobia and bullying, we offer calm words when you need them most.

Our lesbian, gay and bisexual volunteers provide confidential and non-judgmental listening, support, information and referrals for people across the UK from all backgrounds. And we're non-directive, so we won't tell you what to do. For further information on LLGS, visit www.llgs.org.uk AND for up to date community listings go to www.queery.org.u