We would all like to bury our heads in the sand when it comes to debt, but the stark reality is that the longer you leave it, the worse your situation will become, so act now. There are a number of simple steps that you can take to tackle the problem head on and get back in the black.

Prioritise

Work out which debts you need to address first. Some will be more urgent, while others, such as a student loan, can be cleared over a longer period of time. You could divide them into two groups: priority and non-priority. Mortgage repayments, for example, would be considered priority debts because failing to make your repayments could result in you losing your home.

Whether you want to tackle the smallest, largest, most expensive or cheapest debt first, it is vital that you keep up the minimum repayments on all debts. Not doing so can damage your credit score and reduce the chance of obtaining credit in the future.

Budget

To help to work out how much spare cash you can devote to repaying debts, it is crucial that you draw up a budget.

You can use a budget calculator online or simply sit down with an old-fashioned pen and paper and list all your income and outgoings. Then try to cut back where you can and keep a lid on costs wherever possible.

Boost

A simple and obvious way to speed the process of clearing your debts is to raise your monthly payments, and there are lots of ways to get the extra money you will need to do it.

The possibilities are almost endless, from renting your driveway to selling your old mobile phone. You could try selling unwanted presents or gadgets on eBay or other auction sites.

It is also worth making sure that you are not due any tax credits or government benefits.

Check that you are on the best deals for your insurance, loans, mortgages and credit cards by using price comparison websites such as Moneyfacts.co.uk or moneysupermarket.com, Also check whether you are paying for loan insurance on your mortgage or other credit and decide whether you really need this cover.

Savings

If you have a pot of savings locked away fro emergencies, consider using the money to clear debt. It is likely that the cost of your debts is more than the return on your savings.

Snowballing

Once you have organised your debts, you may want to look at clearing them through a process of snowballing.

This involves making the minimum payments on your debts but using any extra cash to pay off one of them. Once you have finished clearing this first debt, you should then focus on the second debt, using the same extra cash, plus the money that you were using to make the minimum payment on the first debt. Then simply continue this process until all your debts are cleared.

Consolidate

If you are overwhelmed by the number of different debts you have, it may be worth consolidating your debts into one large loan.

The most common way of doing this is to move all your credit card balances to a new card with a 0 per cent rate for balance transfers.

But be careful if you decide to take out a consolidation loan. They can be expensive in the long term and may be secured on your home.

Communicate

Having relatively small amounts of debt is now extremely common. The average UK adult owes £29,500, including mortgages, so you are certainly not alone. However, if you are struggling to make repayments, or you are feeling overwhelmed by your situation, seek help from a debt charity.

Also try speaking to your lender. It may be willing to make an agreement over a new repayment timetable. You could also speak to a debt management company. And if you are really stuck, you could consider an individual voluntary agreement or even, as a very last resort, bankruptcy.

Five news stories

Consumer debt crisis set to soar next year

‘The age of turbulence’ - and how to survive it

Government's court order plan will allow people in debt to keep their creditors at bay

Debt worries hit record levels as festive buyers face payback time

Consumer pain looms with banks to increase credit cost

Five features

Are you beginning to feel the pinch?

Dogged by debt?

Detox cure for a festive financial hangover

Save £10,000 tax in the new year

Learning to live with just a little luxury

Five videos

The pros and cons of an IVA

Managing Money

Money Matters Part 1

Tower of Debt Song

Bill Rancic on Debt Management

Five websites

Consumer Credit Councellng Service

Credit Action

Money Basics

Citizens Advice Bureau

National Debt Helpline