Debt and Money Management
DON’T PUT YOUR HOME, OR HEALTH, AT RISK
Managing your money to avoid debt and financial anxiety is important. Poor financial health leads to poor physical and mental health too particularly if you:
- Don’t have enough money
- Can’t pay your bills
- Have debts which you can't repay
- Barely have enough money to buy what you need
- Stop opening letters because you're afraid of what’s in them!
If you are struggling or find yourself worrying about meeting your financial commitments, there is help.
- First, make a list of all your creditors, your debt balances, how much you should, and could, repay
- Don't be afraid to contact your creditors to explain your situation and to ask for their help. Most will put a revised repayment plan in place for you
- Deal with your priority debts first. For example, if you are behind with your rent, mortgage, utility bills, or loan repayments
- 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, 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 or a prison sentence for wilful non-payment |
| 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 |
| 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 |
| Personal loans | Non-priority | Additional charges, negative credit rating, county court judgement, bankruptcy |
| Charge cards | Non-priority | Additional charges, negative credit rating, county court judgement, bankruptcy |
| Catalogues | Non-priority | Additional charges, negative credit rating, county court judgement, bankruptcy |
Get specialist help if you have borrowed money from a loan shark and have difficulty making your repayments. To report a loan shark visit the UK Government website.
- 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 - visit their website here
- Citizens advice Bureau on 03444 111 444
- Money Advice Service - visit their website here or call 0800 138 7777
(Monday to Friday, 8am to 8pm; Saturday, 9am to 1pm. Sunday and Bank Holidays, closed)