How can I pay off my debts and what help is available?


Identify which bills and debts are most urgent and pay them first, says debt advice charity StepChange.

That will include your rent or mortgage repayments, and any other loans secured on the home. It also includes gas and electricity bills, child support and maintenance payments, council tax, income tax, VAT and other taxes, TV licence payments, court fines and payments.

These are all what are known as priority debts and bills, because there can be serious consequences if you do not pay them, such as losing your home or facing court proceedings.

You may have additional debts, such as credit card and store card debts, pay-day loans, buy-now-pay-later payments, overdrafts, unsecured loans and water bills. If you do not pay these off, their cost can spiral and could lead to legal action or bailiffs seizing your property.

StepChange advises trying to make the minimum payments on every debt to avoid default charges, which can affect your credit rating. After that pay most towards whichever debt has the highest borrowing cost or interest rate.

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