How do you rebuild your finances after losing your home?

First: a safe place to live

If you're about to lose your home, or already have, contact your local council's housing team straight away. In England and Wales, the law treats you as threatened with homelessness if you're likely to become homeless within 56 days, or if you've had a valid section 21 or section 8 notice that expires within 56 days. Once the council is satisfied of that and you're eligible, it must take reasonable steps to help you keep your accommodation or find somewhere else. Apply early. You don't have to wait until the bailiffs arrive. Scotland and Northern Ireland have their own systems.

Then: get on top of what's left

• Priority bills first. Citizens Advice says to deal first with debts that can cause the most serious problems, such as rent, Council Tax and energy, before credit cards and loans.
• Mortgage shortfall. If a repossessed home sold for less than you owed, the lender can still chase the difference. Under the Limitation Act 1980, a lender generally has 12 years to recover money secured by a mortgage, and 6 years for arrears of interest. Ask for a full statement of how the shortfall was worked out, then offer an affordable payment in writing.
• Breathing Space. In England and Wales, a debt adviser can apply for up to 60 days' protection. During that time, creditors can't add interest or charges or take enforcement action, while you make a plan. You still need to make your repayments.
• Free debt advice. A free adviser can look at options such as a debt management plan or an IVA if your debts can't be paid in full.

Rebuilding as a couple

Money stress is hard on any relationship. Being clear about who owes what helps:

• Marriage doesn't merge your credit files. Experian explains that you aren't responsible for a partner's debts unless they're in your name too. Getting married or living together doesn't link your credit files.
• Joint credit does link you. A joint account, joint loan or joint mortgage makes you "financially associated", and lenders may look at your partner's record when you apply.
• Agree a shared plan. Write down your joint income, essentials and debts, and decide together which debts to tackle first. Agree a small amount each of you can spend without asking.
• Keep your own credit healthy. If things don't work out, each of you may need to borrow alone. Paying bills in your own name helps.

Rebuilding your credit

Equifax says defaults, CCJs, IVAs and bankruptcy affect your score for up to six years. The effect fades over time, especially once you're paying on time again. Check all three credit reports, correct any errors, register to vote at your new address, and avoid lots of credit applications in a short space of time. Once you no longer share finances with someone, you can ask the credit reference agencies to remove the financial association.

Common mistakes

• Ignoring letters about a mortgage shortfall. The debt doesn't go away.
• Borrowing to cover a deposit or rent before your budget can cope with the repayments.
• Waiting until you're on the street to ask the council for help.
• Hiding debts from your partner. Joint plans only work with the full picture.

Keep reading

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