Debt and Money Management
Managing your money is one of the most important things that you must do. It could be stressful when you:
Don’t have enough money
Can’t 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 five simple steps:
Complete a personal budget and plan your expenditure based on your income cycle. For example, complete a fourth nightly budget if you are paid every two weeks. Use your payslips, benefits payments, bills, bank or other statements to complete an accurate budget. Watch Money Advice Service’s Beginner’s guide to managing your money for more advice.
Maximise your income and reduce your expenditure as much as you can and ensure that you save for life’s little emergencies.
Make a list of all your creditors, your debt balances, how much you should and could repay.
Make an offer to your creditors if you can and ensure that you deal with priority debts first.
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.
|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|
|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|
|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. To report a loan shark visit the UK Government website.
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 – Visit their website here.
Citizens advice Bureau- 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)