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Financial Management Skills are important Financial Management when debt becomes diffilcult or impossible to repay. Most people in debt have poor financial management skills, are struggling with their financial affairs and do not know what options are available. PLEASE CALL 0800 074 6918 TO SPEAK TO A DEBT ADVISOR Bad financial managment driven solely by people ignoring their problems is all too common. E-insolvency is able to offer independent financial managment and debt advice, at no cost. . The debt advisers at E-insolvency provide specialist debt solutions to clients based upon giving 'best debt advice'. Because of this our clients can be assured that the solution recommended to them is the right one for them. All our debt advice is free, in confidence and without obligation. Financial management is a core part of staying debt free. It is essential to the ein day to day budgeting. Direct access to our team of trained Debt Advice Counsellors is available now by calling free on 0845 612 2626 Strong financial management is knowing what debts to pay first When you're sorting out how to pay back your debts, you'll need to identify the priority debts. This will mean you can use your available money to settle the most important debts first. Priority debtsThe most important debts aren't necessarily the biggest ones. Priority debts are ones where serious action can be taken against you if you don't pay what you owe. Some examples of priority debts, and the consequences of not dealing with them, are listed below. MortgagesIf you don't keep up with mortgage payments, the mortgage lender can take legal action to take possession of your house and sell it, for whatever price they want. If the price they get is less than the remaining debt you'll still be liable for the balance. RentIf you fall behind with your rent, your landlord can evict you (and still take you to court for the money you owe). TaxNot paying tax can lead to you being made bankrupt or going to prison. Utility billsGas and electricity companies can disconnect their services to your home if you don't pay their bills. Even a phone bill can be a priority if you need the phone to help you earn your living. Hire purchase (HP) debtAny debt should be seen as a priority if what you're buying on credit (or 'HP') is essential such as buying a car you need for getting to work. Other priority debtsIf any of the following debts are unpaid, a court could use bailiffs to come into your home and take your goods away: - Council Tax or Business Rates
- court fines
- maintenance and child support payments
Your goods would be sold to pay what's owed. If, after this, you still owe money, there's a possibility you might be sent to prison. Non-priority debtsYou may not lose your home or go to prison for not paying 'non-priority' debts, but you can still be taken to court and ordered to pay what you owe - often with extra costs on top. If you still don't pay after you've been ordered to do so, bailiffs can be used to seize your property. Examples of non-priority debts include: - credit card or store card arrears
- catalogue arrears
- bank overdrafts and loans
- benefit overpayments
- money borrowed from friends or family
- non-essential goods bought on hire purchase (HP)
However, any debt that results in bankruptcy proceedings is the highest priority. Once bankruptcy starts, any leeway your other creditors gave you will disappear as they try to protect their debt from the other creditors - it's very important to respond to any court claims as soon as you can and get advice. There are many legal and respectable methods to deal with debt in the UK such as: If your debts are so serious that you face the possibility of bankruptcy. Bankruptcy is a serious matter - you'll have to give up possessions of value and the interest in your home. However, you don't have to become bankrupt just because you're in debt. You can try to make arrangements with your creditors instead - including: - informal agreements - you write to your creditors and try to agree a repayment timetable
- individual voluntary arrangements (IVAs) - an insolvency practitioner helps you negotiate repayment terms
- administration orders - a county court orders you to make payments to the court, which the court then distributes amongst your creditors
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