A lot of people who are dealing with debt aren’t sure which bills you have to pay and which you can set aside.
It’s particularly difficult when some creditors are making your life a misery by phoning you up, sending letters and even sending bailiffs around to get their cash.
Here are the essential facts to help you work out which bills must be paid and which ones can wait if you really don’t have the money right now.
- The bills you HAVE to pay
- The bills you can set aside if you have to
- Where to get help with problem debt
You might be surprised at the bills you have to pay, but it makes sense when you look at the list.
Essentially you must pay the bills that keep the roof over your head and stop you being taken to court. These include:
- Mortgage, rent and any loans secured against your home (or you will lose your home)
- Income Tax, National Insurance and VAT (or you can be prosecuted)
- Council Tax (or you can be made bankrupt)
- Gas and electricity bills (or they will turn off your supply)
- Child maintenance (or you will be prosecuted)
- TV Licence (or you will be prosecuted)
- Hire purchase agreements – if the items are essential like a washing machine (or they will be taken away)
- Court fines (or you could be imprisoned)
Any unsecured loans or credit cards can be put a long way down the list of bills you have to pay if money is too tight to mention.
The bills that aren’t as desperate as the ones above are:
- credit card, store card debts or payday loans
- catalogue, home credit or in-store credit debts
- bank or building society loans
- personal loans
- money borrowed from friends or family
Once you have paid the essential bills in the first section – or agreed with them to pay a smaller amount over a longer period – and you find you really don’t have enough to pay even the minimum on your unsecured loans and cards, this is not a good situation, but it’s not as bad as if you couldn’t pay the essential bills.
Credit card and loan companies can certainly make your life unhappy with their constant calls and letters, but, although they sound tough, they don’t have quite the power that they seem to have.
They could eventually take you to court or send bailiffs round to collect money from you but that can take a long time.
See how you can deal with these creditors effectively here.
Water and sewerage bills are treated as non-priority debts but they are an ongoing service that you need to pay for. If you don’t pay at least your current water and sewerage bills, the amount you owe will continue to go up, making things tougher for you later on.
Where to get help with problem debt
The best place to start is with the free debt help agencies. These are, primarily:
- Citizens Advice Bureaux (CAB) which provide free, confidential and independent advice from thousands of locations in the UK
- StepChange is a debt charity offering an online debt remedy service and free debt advice in person or on the phone.
- Christians Against Poverty is a national, free debt advice service that runs through local churches.
- Nationaldebtline is a website offering a guide to dealing with debt – and has some useful sample letters for writing to creditors.
- Payplan is a free debt management company funded by the credit industry, which makes repayment arrangements
- Shelter is a great resource if you are having problems with your rent or mortgage. They can stop you being turfed out of your home, even if you’re about to go to court.
Try any of these organisations for free help with budgeting, dealing with your creditors, keeping the roof over your head and getting out of debt and into wealth again!