Information on how to prioritise your debts and payment proposals.
'Non-priority' or 'credit' debts
Although you may not lose your home or go to prison for not paying 'non-priority' or 'credit' debts, you can still be taken to County Court and ordered to pay what you owe - often with extra costs on top. If you still don't pay after you've been ordered to do so, there are several enforcement options the Court may give your creditors to use to recover what you owe them.
It's a good idea to consider taking free, independent advice on your options for dealing with your non-priority debts - for impartial advice contact one of the many non-fee charging agencies. Visit our 'Useful Links' section for more information.
Examples of non-priority debts include:
Credit card or store card arrears, Catalogue debts, Water rates arrears, Bank overdrafts and loans not secured on the property, personal loans with finance companies, doorstep lenders, payday loans, and money borrowed from friends or family.
TIP! Aim to pay off the most expensive debts first. Compare the APR - the higher it is, the more expensive it is. Also consider the possible penalties for late or missed payments.
You should only re-schedule, consolidate or transfer debts with the guidance of an independent specialist money adviser and ensure you read and understand the terms and conditions fully.
Making payment proposals to your creditors is quite a daunting task, especially if you have many to cope with. It is important that you contact each and every one.
Ideally, the most convenient way of dealing with this is to telephone them and offer a copy of your budget planner to support your proposals. Alternatively, independent debt advice agencies will do this for you. You can also click our 'Free online debt counselling' link to complete your budget planner and receive free independent online debt advice.