Which Debts To Pay First ? by Jim Kendall

In this article we help you to decide which debts to pay off first. Do you find yourself inundated with scary debt letters and phone calls and each of those companies insist on you paying their debts first? In most cases this is exactly what you should not do.



Quite often the companies that do not use aggressive tactics such as phone calls and letters are usually the most important debts that you need to pay first, examples of this are your rent / mortgage.



If you begin experiencing problems paying your debts, contact your creditors immediately and tell them that you are currently having problems, they prefer to be kept in the picture and should be able to work out an arrangement if you contact them early enough.



Here is a list of the debts / bills which you should aim to pay first over your other debts:



* Tax (council)

* Hire purchase

* Electricity / gas

* Maintenance and child support

* Fines

* Income tax

* Rent / mortgage

* Second mortgage

* Television licence



if you do not keep up payments on these kind of debts it could have serious consequences such as losing your home, disconnecting electricity / gas, losing your car etc. Whereas not paying a credit card debt immediately will not have any serious consequences, however you can still be taken to court and ordered to pay what you owe.



An example of non-priority debts are:



* Credit cards / store cards

* Bank loans and overdrafts

* Family loans



Your first step however is to contact your priority creditors as soon as you realise you are having difficulty paying your debts, you can then try to agree on an affordable payment arrangement with them. It is also worth seeking advice as your debt advisor may do this on your behalf.



Once you have organised your priority debts, you still need to deal with the non-priority debts. Once you have arranged payments to your priority creditors, your non-priority creditors will wish to receive a fair share of any money left over. A debt advisor will help you to work this out and can even negotiate this for you with your various creditors it is also important to ask for interest and charges to be frozen, again a debt advisor can negotiate this on your behalf.



The most important step that you can take is not to bury your head in the sand and contact your creditors as soon as you start having repayment problems. If you receive a court summons make sure you get advice immediately as you will be required in court to demonstrate that you can afford to pay your debts and clear the arrears within a reasonable amount of time.


If you have problems with debt you can speak to one of our UK debt advisors with a 100% free consultation who can also provide IVA information which can write off up to 70% of your debts.


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