Do not ignore debt or any incoming bank and bill statements – they don’t go away
- Set yourself realistic goals – see your debt and finance as lots of smaller distinct issues rather than one big problem. It will ensure you don’t panic and can deal with each issue in turn.
- Find a debt management system that works for you. Some consumers will love using excel and spreadsheets, and some will prefer to use old fashioned files.
- Do not be tempted to borrow more money to pay off the existing debts. Instead seek help and follow the information below on how to differentiate your debts . Seek assistance from your university, from the Citizens Advice Bureau or from specialist money advice organisations who can help you for free, such as the Consumer Credit Counselling Service or The National Debtline.
- Some debts are more serious than others. This is not due to the size of the debt, but the consequence of being unable to pay this debt. Non-payment of certain debts can lead to legal consequences such as court action, loss of your flat or the loss of essential services (e.g. your fuel supply). Below is a summary of the different types of debt.
There are different ways in which the debt can be broken down –
- Priority debts
- Educational debts
- Non-priority debts
Priority debts are those debts which have the most serious consequences, sanctions and repercussions if they become unpaid, such as:
- Rent/Mortgage
- Gas/Electricity/Water Bills
- Council Tax
Educational debts can vary in their prioritisation depending on your circumstance:
- Student Loan
- Graduate endowment fees
- Library fines
The consequences of non-priority debts are less stringent due to the lack of legal mechanisms which organisations can implement:
- Credit/Store Cards
- Bank Loans/Overdrafts
- Loans from Family/Friends
