Types of debt and borrowing
There are various types of debt. Understanding each one and making sense of your financial situation is really important when working out the best method of dealing with your priority debts. This is because the consequences of not paying them can leave you at risk of losing your home or other assets.
If you’re trying to pay different creditors it’s important to understand the priority level of each of them. This can sometimes make it complicated to work out the best method of dealing with your situation.
Here are a few of the most common debt queries we receive:
Help with energy bills
If you’re struggling with your energy or water bills it’s important to get in touch with your utilities provider to let them know as soon as possible. This way they’ll know you’re not ignoring the debt and you might be able to come to an agreement with them about repayments.
Many utility suppliers offer additional support to assist customers who are having financial difficulties including:
- Reducing or pausing your energy bills
- Reassessing your energy arrears.
There are also other sources of help available such as grants and financial assistance through retailTRUST that can help you if you’re struggling to pay your energy bills.
For more advice on dealing with energy bills visit PayPlan
If you’re struggling to pay a contract for goods or services such as a gym, mobile phone or TV package or if you have arrears, you should contact the service provider as soon as possible and talk through your options. You may be able to agree a payment plan to enable you to pay off what you owe. Alternatively, your contract provider might also be able to reduce the payment or spread any arrears over the remainder of you contract.
Depending on the provider, you may be able to cancel your contract without paying a fee, but this depends on the terms of the contract. Remember if you cancel it, there may be a notice period, or you may be subject to a cancellation fee.
If you can’t cancel your contract and you’re worried that you won’t be able to afford it or you have arrears you’re struggling to repay, you should speak to PayPlan to get advice on dealing with your situation.
Court debts and fines
It is important to remember that court fines should always be treated as priority debts because the consequences of not paying or falling into arrears can be serious.
If you think that you can’t afford the fine, you should immediately contact the fines officer at the court and request a reduction in your payments. It is essential to do this before you miss a payment as the court can take further steps to collect the fine if you miss a payment.
The consequences of not paying a court or criminal fine can be very serious. The court’s powers to collect unpaid fines vary depending on where you live in the UK.
It’s possible to be sent to prison if you don’t pay a court fine, but this course of action is usually a last resort reserved for people who are ignoring or trying to avoid payment. This is why it’s very important to let the court know immediately if you’re struggling to afford the payments. If it’s clear that you’re not ignoring the fine, and you’re making every effort to pay what you can, it’s very unlikely you’ll be sent to prison.
If you need additional support with court debts and fines, please speak to PayPlan
Our wellbeing partner PayPlan has created some useful guidance to help you with a range of other debts:
- Credit card debt
- Logbook loans
- Joint debts
- Government debts
- Council tax debts
- Secured loans
- Business debt
Other resources which you may find helpful: