Debt and Money Management

Managing your money is one of the most important things that you must do. It could be really stressful when you:

  • Do not have enough money
  • Can not pay your bills
  • Have debts which you can not repay
  • Barely have enough money to buy what you need
  • Stop opening your letters because you are afraid of what’s in there

You can manage your money in 5 simple steps:

  1. Complete a personal budget and plan your expenditure based on your income cycle. For example, complete a forth nightly budget if you are paid every two weeks. Use your payslips, benefits payments, bills, bank or other statements to complete an accurate budget. hyperlink Money Advice Service video Beginners Guide to managing your money. We show you how.
  2. Maximise your income and reduce your expenditure as much as you can and ensure that you save for life’s little emergencies.
  3. Make a list of all your creditors, your debt balances, how much you should and could repay
  4. Make an offer to your creditors if you can and ensure that you deal with priority debts first
  5. Get specialist help if you are unable to repay your debts.

Types of debt

Priority debts: Non payment of a priority debt may lead to imprisonment, the loss of your home or essential services.

You should always manage your priority debts before your non priority debts.

Non priority debts: The consequences for failing to repay a non priority debt are far less serious. You may have to pay more credit charges, get a poor credit rating, county court money judgement or become bankrupt.

Debt Category Potential Consequences
Rent arrears Priority Eviction, bankruptcy,Court fines, bailiffs, bankruptcy, or a prison sentence for wilful non-payment
Fine default Priority Extra costs, bailiffs, possible prison sentence
Gas/electricity arrears Priority Disconnection
Maintenance (child support) arrears Priority Deductions from wages or a prison sentence for wilful non-payment
Income tax arrears Priority Fine, county court judgement, and ultimately bankruptcy
Water arrears Non-priority Additional charges, deductions from wages or benefits, a poor credit rating, county court judgement
Credit cards Non-priority Additional charges, negative credit rating, county court judgement, bankruptcy
Personal loans Non-priority
Charge cards Non-priority
Catalogues Non-priority
Doorstep collected loans * Non-priority
Hire purchase arrears Non-priority Repossession of item, added charges, negative credit rating, county court judgement, bankruptcy
Telephone arrears Non-priority Disconnection, added charges, negative credit rating, county court judgement, bankruptcy
Personal debts to family and friends Non-priority Breakdown in relationships with your family and friends.

Get specialist help if you have borrowed money from a loan shark and have difficulty making your repayments https://www.gov.uk/report-loan-shark.

Specialist Debt Advice

Shelter – Call Shelter’s Support Helpdesk on 0300 330 1234 to get details about your nearest face-to-face centre

National Debtline on 0808 808 4000 (Monday to Friday 9am to 8pm and Saturday 9.30am to 1pm)

StepChange Debt Charity on 0800 138 1111 (Monday to Friday 8am to 8pm and Saturday 8am to 4pm)

The Debt Advice Foundation on 0800 043 4050 (Monday to Friday 8am to 8pm and Saturday 9am to 3pm)

Community Money Advice – http://www.communitymoneyadvice.com

Citizens advice Bureau – 03444 111 444

Money Advice Service- https://www.moneyadviceservice.org.uk -0800 138 7777 (Monday to Friday, 8am to 8pm

Saturday, 9am to 1pm. Sunday and Bank Holidays, closed.