For many of us, January’s payday just can’t come soon enough. If you overspent at Christmas, or borrowed more than you can afford, you might be thinking that you just can’t afford to pay all your bills this month. But are there certain bills you should never miss?
If you are going to miss a repayment, make sure you keep in touch with the firms you owe money to and explain your financial situation to them. It’s sometimes possible for them to freeze interest and charges, or for them to agree for you to take a payment break or lower payments while you get back on your feet.
Your bills are separated up into priority payments and non-priority payments. The difference between them is how severe the consequences are if you happen to miss them. So the answer is: yes, there are some bills that you should always pay and put first.
Priority payments include things like your mortgage or your rent, as missing these can result in the very serious consequence of losing the roof over your head. Any secured loans you have should be given priority as well, for the same reason. Council Tax is also a priority payment, as if you don’t pay it over a long period of time it can result in a prison sentence, in the more extreme cases. You should also make sure that you pay any court fees or child maintenance. Utility bills are also a priority: it’s vital, especially in the winter, that you can keep the heating, hot water and lights on and have power to cook.
If you’re getting letters, calls and texts from people you owe money to, it can seem very urgent indeed. But there are some that are less important than others. Unsecured debts, like credit cards, personal loans and catalogue or store card debts, are not as urgent as secured payments and if you have to miss something, it’s best that it’s something like this.
That’s not to say there won’t be any consequences to missing these payments. If you left an unsecured debt unpaid for a long period of time, your creditor may choose to take legal action against you and that could result in you being issued with a County Court Judgment (CCJ). Missed payments will also show up on your credit history for 6 years.
So if you’ve started the New Year with a financial hangover, and you need to skip a repayment, make sure it’s not a priority one. And while it may be better to miss an unsecured debt repayment rather than your rent for example, you will need to put a plan together to make sure you can keep on top of all your debts in the long term.
If you’re worried that you won’t be able to get back on top of your repayments, it may be time to reach out for help and speak to a debt advisor about your situation.
Debt Advisory Centre: 0161 871 4881