It's common for people dealing with personal debt to leave letters unopened, or to throw them away. It's a way of dealing with your problem: out of sight, out of mind. In fact, of course, all that happens is that you miss an opportunity to talk to your lender, tell them about your current circumstances and see if you can work out a way of paying your debts back. If your financial problems have got to the stage where you need debt management advice, those letters could come in handy.

Why paperwork matters

The attitude of lenders towards debt varies from one to another. Some may be sympathetic, giving you additional time to pay, for example, or allowing you to reduce your payments to an affordable level. Some mortgage lenders offer payment holidays, so that you can miss a certain number of payments if things are tight, provided you make up what you owe within an agreed period. Other lenders don't want to negotiate at all, and make it very difficult for you to get out of financial trouble. If you keep all paperwork; the letters sent to you, the letters you've sent to the lender, copies of emails and notes of any phone calls you've made, you could:

• Show evidence to the courts – if you are facing repossession or your lender is filing for bankruptcy against you, you can show your paperwork to the court, or to anyone who is acting on your behalf. This might be particularly important if your paperwork shows that you really tried to work something out with your lender, but they didn't give you any opportunity to pay back the debt at any other level. It may not stop the proceedings, but you might get some sympathy from the court which will be reflected in the judgement.

• Apply for an IVA – an IVA is a debt management solution that allows you to make a formal arrangement with your creditors to pay them back over a five year period at a set amount each month. In order to apply for an IVA, you must know who all your creditors are and how to contact them. Your paperwork will be essential to ensuring that you speak to all your creditors and they can be included in your IVA agreement.

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.