After the joys of Christmas and New Year, it's time to face up to reality – and for some of us that will also mean facing debt. But there is help out there which means you don't have to struggle alone. LAUREN COCKBILL reports.

WHEN there are Christmas presents to buy and parties to go to, it's easy to tell yourself to worry about the money next month.

But now it's January, finances are over-stretched and reality can be hard to deal with.

Debt charity Credit Action has reported that, due to Christmas spending, more than 6.5 million people fear they will not be able to pay their bills at the end of the month and three million have even admitted they still have debts from Christmas 2008.

The good news is that sorting out finances has topped the New Year's resolutions list and in Nottingham there is plenty of help to make these come true.

This time last year Christine Clarke, 49, from Chilwell, who survives on benefits due to disability, was finding it hard to cope with her finances and decided to take advantage of a loan offer.

She says: "I was really struggling to pay for Christmas and my utility bills, so when a letter dropped onto my doormat saying I could borrow £500, I thought it was the answer to my prayers; it was the exact amount I owed.

"Within two weeks I had £500 in cash but when it was handed over they said I had to pay back that amount, plus an extra £340. This was a staggering interest rate and two months later, when the £500 was gone, it became obvious I couldn't afford to pay it back.

"When I got the loan I felt great; it was quick and easy. However I regret it now because it just landed me in more debt."

Christine decided to contact Nottingham Credit Union (NCU). They took on her debt which meant she had to pay it back to them but with a much lower interest rate.

"There was a great sense of relief. I felt much more in control and it saved me £169 in repayments," she said.

"I'm actually now a volunteer there for two hours a week and save with them too. I'm more careful with my spending and get my bills sorted straight away.

"Any spare bits of change I have, I put away."

Christine also takes part in the NCU Christmas Club which helps members save enough money for Christmas. Savers have to put money away before October but from November to January no withdrawals can be made to ensure there is enough money in the pot to pay for the festive period.

The Nottingham branch of another debt charity, the Consumer Credit Counselling Service, has already seen enquiries increase by 30% this month. Manager, Tim Blessed, says: "January is a particularly difficult time of the year. However, there are ways to ease the burden.

"Always try to put together a household budget sheet, showing your income and expenditure, to work out exactly how much you might have available to pay towards your debts. It is always better to pay something, rather than nothing at all. If you can, try to pay at least the minimum payment so that you don't trigger any 'late payment' charges."

Tim also stressed the importance of paying priority bills first, as not paying these can result in court summons.

He says: "Your house, utility bills and council tax are most important because of the consequences of not paying them."

When times are hard, the temptation to borrow more money to pay off your debts might seem appealing. Tim's advice is to make sure you do not use the money for anything else and destroy any cards associated with that debt to prevent you building it up again. He also recommends against continually increasing your overdraft as this will result in higher bank charges.

Brian Nathan, 42, from Mapperley, experienced the harsh consequences of racking up credit cards.

Two years ago he was in £70,000 of debt, had creditors knocking on his door and bills pouring through the letter box.

Brian says: "My HGV business was affected by the high price of diesel and some of my customers were late in their payments. To make ends meet, I took out a credit card but I soon had to get another to pay the first one off. At one point I had six credit cards."

Brian realised his business was on the brink of collapse and he was worried he would lose his home. He decided to call the UK Insolvency Helpline, which organised an Individual Voluntary Arrangement (IVA).

"They have written off half my debt. I make monthly payments of £400 over five years. I've got three years left until I'm debt-free."

He added: "Now I'm in control of my debts I feel comfortable. I've kept my home and my wife, three children and dog are happy. My family's got a future now; we've got breathing space to grow. My debt problems took years off my life."

An IVA is a legally binding agreement between the person in debt and their creditors. It means you pay back an agreed proportion of debt over a set amount of time, usually five years. It is seen as a more flexible arrangement than going bankrupt but it will stay on your credit file and make it difficult to get credit in the future. Another way of dealing with credit card debt is by negotiating with creditors for reduced payments and freezing the interest rate.

Cath Stocks, an adviser from Nottingham Citizens Advice Bureau, says: "If you do reduce your payments, this is likely to affect your credit rating but if you have already defaulted, your rating will already have been damaged. You can improve it again, however, by a period of regular payments to your creditors.

"If you have lost control of your finances and excessive bank charges are being added, we would advise opening a new basic bank account with a bank where you have no debts to prevent essential income being taken in charges."