When you owe money to several companies and don’t have enough income to pay them all – the calls, letters and text messages may start to cause you stress. With the cost of living continuing to rise, it can be difficult to know which debt should be paid first. Indeed, this is a dilemma that is affecting many people across the country right now.
Some bills that you receive are regarded as priority debts because the consequences of not paying those priority debts are greater than the consequences of not paying the other non-priority debts
For example, if you don’t pay your mortgage, your home could be repossessed. If you don’t pay your rent, you could be evicted. Whereas the consequences of missing a credit card payment do not have such a severe consequence.
However, this doesn’t mean that you should ignore your non-priority debts as not paying back loans, credit cards and things like a bank overdraft can create problems for you too.
You must always pay these priority bills before your other debts. Even with Coronavirus measures in place, where possible, these debts should be paid as priorities, because the consequences of non-payment can be serious.
If you have unaffordable, unsecured debt that’s making it more difficult to pay your priority bills, then it’s really important that you get tailored and confidential debt advice as soon as possible.
Remember to always get any payment breaks confirmed with your lenders – never assume that it’s an automated process. If you’ve been made redundant and forced to claim Universal Credit, or you have been furloughed – these may be enough to reorganise your priority and non-priority debts – however, make sure you get proof of this as the lender will usually ask for proof of your change of circumstance.
Your unsecured debt is classed as ‘non-priority’ because the consequences of not paying these each month are much less severe than not paying your priorities each month.
Trust Deed Scotland® can take a look at these debts with you and give expert debt advice and if they are unaffordable, we can provide solutions on how best to pay these debts while you ensure that you’re on top of your most important priority debts. Trust Deeds, Debt Arrangement Scheme, and other tools exist which allow you to reduce unsecured debts down to a more affordable level.
What Is A Priority Debt In Scotland?
Typical examples include the following debt types:
Mortgage – not paying your mortgage could result in your property being repossessed.
Rent arrears – not paying your rent could result in you being evicted from your home.
Child maintenance – not paying your child maintenance service can result in your wages being arrested, goods being removed from your property and a liability order being made against you.
Council tax arrears – not paying your council tax could result in your wages being arrested, or goods being removed from your property.
Utility bills – not paying your gas and electric may result in you getting disconnected, or a prepayment meter fitted.
Broadband & TV – not paying for your broadband & satellite tv services could result in you being connected.
What Is A Non-Priority Debt In Scotland?
Failing to pay non-priority debts is usually less serious than not paying a priority debt. The most important debts that you have are not necessarily the biggest ones.
You can’t be sent to prison for not paying non-priority debts. However, your creditors may take enforcement action against you if you do not pay them.
All non-priority creditors should be treated fairly. You should not make full payments to one creditor while reducing payments to another. If you cannot afford the minimum payment to any of your non-priority debts, you should make reduced payments to all of them using a pro-rata calculation.
Failure to do so could result in your debt being passed on to a debt collection agency and a Decree (CCJ in Scotland) being made against you.
More likely, the non-payment of unsecured debts will firstly result in a default notice being served against you.
When a default notice is issued against you for missed payments, you will find your credit rating is affected.
Contact Trust Deed Scotland® for advice on 0141 221 0999.
Non-Priority Debts in Scotland include:
Credit card debts, store cards, and personal loans. Bank overdrafts, payday loans, catalogue debts.
Money that you borrow from your friends and family is also regarded as a Non-Priority debt.
If you have unaffordable debts and you’re struggling to repay them all, don’t worry you’re not alone. an experienced debt adviser can help you separate your priority and non-priority debts before explaining what options may be available to you for dealing with them.
Struggling With Non-Priority Debt In Scotland?
If you’re struggling with non-priority debt in Scotland – Work out your budget to check how much you have left each month after all your household bills have been paid.
You can then use any surplus income to clear your priority arrears as quickly as possible. You can discuss your circumstances with your creditors and offer reduced payments to non-priority debts – this will help free up as much surplus as possible for the priority arrears.
Then, when you contact your non-priority creditors, explain why you’re in debt. If you can’t make an offer of repayment straight away, ask for more time, for example, 14 or 28 days. This will give you more time to get expert advice and work out your budget longterm.
It’s important to try to pay at least the regular instalment in the meantime. If you can’t do this which is understandable, pay as much as you can afford – even a payment of £1 to the non-priority debt shows a commitment to repay your debs and again allows you time to get help as soon as possible.
If you feel like you’re really struggling with unaffordable debts – Don’t worry. You’re not alone.
Trust Deed Scotland® have helped thousands of people in Scotland since 2009. We have dealt with cases that included council tax arrears, credit card debts and payday loans. We’ve successfully prevented and lifted creditor enforcement actions such as Wage Arrestments.
Whatever the cause of your money problems, we can help you find the way out and make a fresh start.
If you have over £3,000 of unaffordable, non-priority debt, and live in Scotland, Trust Deed Scotland® will help find the right solution for you.
Contact us on 0141 221 0999, or find out which solutions you may qualify for by using our free debt calculator tool online.