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Make repayment offers to your creditors based on how much money you have available after your essential spending. Pay your priority debts first, then your non-priority debts. Your creditors may write off some of your non-priority debts if you are unlikely to be able to pay them. Contact an advice agency for more information on which repayment strategy will suit your circumstances.
Repayment strategies Once you have worked out your financial situation you can make repayment offers to your creditor. Your repayment strategy depends on how much money you have available to pay your creditors after your essential spending. Your repayment strategy will be different if you are: - a private tenant,
- a Housing Executive tenant,
- a housing association tenant,
- or you own your home.
Contact an advice agency for more information on which repayment strategy will suit your circumstances. Whichever strategy you choose you must: - pay priority debts, then
- pay non-priority debts.
Use the 'Organising your debts checklist' to help you divide your debts into priority and non-priority debts. Back to top
Pay priority debts You must pay your priority debts first. If you don't pay your priority debts you may lose your home or be fined. Priority debts include: - mortgages,
- loans secured on your home,
- rent,
- gas or electricity bills,
- rates,
- child support or maintenance,
- TV licence.
Get advice before you contact your creditors. An adviser can help you work out the best strategy for repaying your priority debts. Back to top
Pay non-priority debts You must reach and agreement with all your priority creditors before paying your non-priority debts. If you don't pay your non-priority debts you will usually only lose a credit facility. Non-priority debts include: - overdrafts,
- credit cards,
- personal loans,
- catalogue clubs,
- book clubs.
How much should I pay? Work out how much money you have left after agreeing to pay your priority debts. Each of your non-priority creditors will get a fair share of this money. A fair share doesn't mean that each creditor gets the same amount. It means that each creditor gets a share of what you can afford , depending on how much you owe them. Making an offer on non-priority debts Use the 'Non-priority debt letter' when writing to your non-priority creditors. Include your completed financial statement. Remember to include repayments to your priority creditors. Make a copy of each letter you send and record the date on which you received a reply. Get advice from Housing Rights Service or a local advice agency if your non-priority creditor does not get in touch with you. Back to top
Writing off non-priority debts You may not have any money available for non-priority debts after you have paid your priority debts. You can ask your creditor to 'write off' your debt. This means that you would no longer be responsible for paying your debt. The chances of your creditor 'writing off' your debt depend on: - the nature of the credit agreement,
- whether you can ever pay back the debt.
Creditor won't write off my non-priority debts If your creditor won't write off your debt, ask your creditor to hold any action until your circumstances change. Ask for a review of your circumstances in 6 months. Working out a repayment plan is complicated. An adviser can help you work out which repayment strategy will suit your circumstances. Back to top
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Emergency Debt Checklist (
