How to pay off your debt
All debt should be repaid, but some debts are simply more important than others because the consequences could be worse if you don't repay them.
Prioritise your debts
Examples of the most important - 'priority' - debts are:
- Mortgage and rent - the consequences could be repossession or eviction.
- Council Tax - bailiffs could be sent to your home if you fail to pay.
- Gas and electricity - you could be cut off if you don't pay.
- Debts secured against your home - could ultimately result in repossession.
- Child Support payments - you could face court proceedings.
The 'worst-case scenarios' won't happen straight away, but it is important to act quickly if you are having debt problems - because if you ignore the problem it won't go away. Click here to speak to a debt expert about your options and find out more about how to pay off debt.
When you're repaying debt, you need to make sure that you're repaying your priority debts over and above any other debts. But your other debts are important too and shouldn't be ignored. Some examples of other debts include:
- Credit cards
- Store cards
- Catalogue credit
- Store credit
- Overdrafts
- Personal loans
- Debts to family or friends
These other debts are 'unsecured' and there are debt solutions that can help you to repay them at a rate you can afford. In some cases, it's possible to write off part (or even all) of an unsecured debt, but qualifying criteria will apply.
The consequences of not repaying unsecured debts can vary, depending on (among other things) how long it takes you to repay them. Your credit rating can be damaged for six years, for example, making it more difficult and / or expensive to borrow more money. Unsecured lenders can pursue you through the county court if you don't repay what you borrowed and ultimately, you could be made bankrupt if you are unable to repay your unsecured debts - although that wouldn't happen straight away.
Speak to a debt expert
However, there is usually something you can do before things ever got so far. The sooner you act, the sooner you can deal with a debt problem - and hopefully sort it out before it gets out of hand. Click here to speak to a debt expert. They can tell you more about structured ways to pay off debt.
If you have any of the debts listed above and you can't afford them, then you really should speak to a debt expert.