Managing debt
Not every debt problem needs a formal solution. Knowing which debts to prioritise, and when informal arrangements stop working, puts you back in control.
Priority versus non-priority debts
Priority debts carry the most serious consequences if unpaid — rent and mortgage arrears, council tax, energy, court fines and tax. Credit cards, personal loans, overdrafts and catalogues are non-priority. Always cover priority debts first.
Build an honest budget
List income, essential costs and debt payments using a standard financial statement. Creditors recognise this format, and it becomes the backbone of any formal proposal later.
- Include annual costs such as insurance and car maintenance
- Leave realistic room for food and energy
- Never budget a payment you cannot sustain for years
When informal stops working
If token payments never reduce the balance, if interest outpaces what you pay, or if you are borrowing to repay borrowing, an informal plan is no longer solving the problem.
Free advice is always available
Free, impartial debt advice is available from organisations such as StepChange, National Debtline and Citizens Advice. We will tell you if a free route serves you better than a formal solution.
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