Pay My Most Important Debts

People have to live so in assessing which bills to pay first, one must consider the essentials of life – food and shelter.

Servicing of priority debts comes before all other payments, regardless of pressure from creditors. This means paying for somewhere to live, food and drink, clothing and heat & light. Some of these priority debts may also be secured such as a mortgage. So then we must aim to pay the mortgage (or rent), utilities (heat, light, water) as well as food, drink and clothing. Even if we have insufficient income to pay all of our bills, these essentials of life must command the most attention from us or living becomes simply impossible.

Other bills and debts that you have should be seen as non-priority debts and arent as important as paying your priority bills. Most people however will come under pressure from their creditors who will be looking for payment. They will usually send you threatening letters and phone you constantly, basically hunting you for debt payments. However no matter what you owe your creditors no one can afford to lose their home, nor can they afford to have their utilities cut off. Whether the creditors are pressurising you or not you cannot be expected to live without food, drink and clothing, so for these reasons the creditors bills are just not as important.

Once you have made your priority payments any money that you have left over can go towards paying your other unsecured debts. This money is known as disposable income or DI. If you have a big enough DI to pay your non-priority debts by paying the minimum monthly amounts then there is no problem. If you do not have enough DI the firstl thing to do is to divide it fairly between all your creditors and then reach an agreement with each of these creditors on the amount you can pay them back each month.

If you cannot arrange this yourself then the next step to take is to obtain professional advice. You can contact an Insolvency Practitioner and they will determine if you are insolvent or not. They can also assist you in compiling an Income & Expenditure Statement so as to calculate your disposable income, and also explain all available options to you.

The debt options that could be available to you could include Bankruptcy, Administration Order, a DMP, an IVA, a Debt Relief Order, Debt Consolidation or some other financial solution. Once you know all your options you can make up your mind if you want to proceed further with any of the debt solutions. You do not have to commit to anything this point and can walk away & sort out your own finances.

If you want to find out more about being free from debt then visit National Debt Relief where you can also get more information on ivas, dmps and other debt solutions.