Prioritise debt to take control of finances

CITIZENS Advice Devon and Cornwall focuses on issues arising from their clients and also answers some of the most commonly asked questions their offices are being contacted about:

“I hear a lot about trying to manage my debts and I have less money coming in than I use to. I don’t know where to start with it or what to do?”

One in seven people have fallen behind on essential bills – including energy, water, mobile phone and broadband bills, council tax, rent or mortgage payments over the course of the pandemic.

There has arguably never been a more important time to get help if you are struggling to pay your bills, for example your rent, loans, energy bills and council tax.

Council tax is a priority debt which means you have to pay – however you might qualify for a council tax reduction if your income has dropped or if you started claiming benefits recently. You should contact your local council to see if you qualify for a council tax reduction. If you don’t think you qualify, it is still worth asking.

It is also worth speaking to an advice charity such as your local Citizens Advice to see if you are getting all the financial help you are entitled to through benefits and other support schemes.

Citizens Advice Devon and Cornwall’s top tips to help with your debts:

Work out how much you owe – Make a list of whom you owe money to and add up how much you need to pay each month. If you don’t have your most recent statements, contact your creditor to find out what you owe.

Prioritise your debts – Your rent or mortgage, energy and council tax are called priority debts as there can be serious consequences if you don’t pay them. Separate these and work out how much you owe. Speak to your creditor about what support might be available during the pandemic.

Work out how much you can pay – Create a budget by adding up your essential living costs, such as food and housing, and taking these away from your income. Any money you have spare can be put towards your debts. The Citizens Advice budgeting tool can help.

Paying urgent debts – You might have to contact priority creditors quickly in urgent situations, like if you are about to be evicted. Most tenants cannot be evicted without a court order, and there are currently extra protections in place.

Paying non-urgent debts – If you have any money left after paying priority debts, but not enough to make your usual payments, consider getting advice on the best way for you to start getting on top of your debts. Or contact your creditors and offer them what you can afford to pay.

If you can’t pay your debts – If you’ve got little or no money spare to pay your priority debts seek advice from Citizens Advice straight away. If you’re struggling to pay for basics like food, seek help immediately to see what support might be available.

Further information and advice at: www.citizensadvice.org.uk