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Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money.  If you have a question or need help, you can chat to them here.

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How do I prioritise my debts?

By Sara Williams from Debt Camel

If you are worried you don’t have enough money to pay all your bills and expenses this month, what should be paying off first? Sara Williams from Debt Camel has some tips for prioritising your debts.

Top priorities

If you ever speak to a debt advisers, they’ll take a very practical approach to helping you decide what you should be paying off first. They ask what can go wrong if you don’t pay that bill or debt this month.

Deciding what to pay to pay off first is simple: you start with the ones where bad things can happen if you don’t pay the debt or bill. But do you know what they are?

Here is a list of the some of the bills or debts you might need to pay and the problems that can occur if you don’t pay them.

Rent – If you don’t pay your rent, your landlord could kick you out. This could mean no home or a very uncomfortable spot on your mate’s sofa.

Council tax – you could be sent to prison. OK so that’s quite rare, but councils are very fast to go to court and send bailiffs round.

Electricity, gas, phones – these could be disconnected. Unless plan on living in the dark, then you should probably pay these off.

TV license – you could get a large fine and a criminal record.

HP, logbook loans – you may have the goods or the car repossessed.

Magistrates court fines or CCJs – you could have bailiffs come round or have money taken from your wages

Tax bills for the self-employed – HMRC is a very difficult creditor to deal with and may even make you bankrupt.

And everyday living necessities

Equally important are food, heating, transport to work, nappies if you have little ones etc. Those are all essentials!

Consumer debts – not nearly so important

When people talk about debts, they often think of borrowed money, so all the different sorts of loans, credit cards (including store cards and catalogues) and overdrafts.

These are what we call non-priority debts. The problems you get from not paying these bills are less serious than if you miss a priority payment.

If you don’t pay one of these consumer debts this month for the first time your credit rating may be damaged but a debt collector is not going come to your house and take all your things.

Remember, if you ignore debts for a long time you may be taken to court. But that happens a lot faster with priority bills.

A temporary problem?

Sometimes you know everything will be OK soon. Perhaps you have just started a job and won’t be paid until next month, or you are just moving and won’t get your deposit back for a few weeks.

If this is the case, then it may feel scary, but phoning the people you owe money to and explaining when they will be paid usually works well. Also read I’m broke, what should I do? as some ideas there may help during the next few weeks.

When this is the first time you have hit this sort of problem, it can be very tempting to look for an emergency loan. But that normally makes life worse next month, as you have the new loan repayments to make on top of all your current ones.

Getting some help

This may all seem confusing, especially if you don’t have enough money for the essentials. You may be wondering which of the top priorities are the most important! For example, is it ok to not pay the rent if you have just applied for Housing Benefit or Universal Credit?

Debt advisers are good at helping you work out a plan, not just for this month but going forward. So if you are unsure what to do, or things have been getting worse for a while, then talk to someone who can help with debt. Here are a couple of suggestions:

Citizens Advice – provides free advice, usually with an office near you. If you have any problems with benefits, they can also help with those and can give you a foodbank voucher.

National Debtline – a free, telephone or webchat advice service, which is also open in the early evenings and Saturday mornings.

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Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money.  If you have a question or need help, you can chat to them here.

Launch Chat

Chat to the Money Advice Service
Monday to Friday, 8am to 6pm
Saturday, 9am to 1pm.