Much Needed Answers To Some Common Debt Questions

Written by on May 23, 2013 in Money - No comments | Print this page

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Debt concept.Debt is a dirty word today because it’s not just affecting people who lack the morals to repay their creditors, it’s affecting people from all walks of life and even governments around the world are struggling to pay their bills.

There is often a lot of confusion and the unknown surrounding debt and how it affects you because hopefully, you have never been in the situation before.

Things are lot easier if you have somewhere to do a little research and that’s why I’d like to answer some of the most common questions people have when debt becomes too much to handle. So, if you have ever asked the question; “How do I get out of debt?” please read what follows.

Do You Need to Pay Bills in Your Partner’s Name

You are liable for any agreement that has both you and your partner’s name on it. Even if you split up and are no longer in communication with each other, you are still expected to repay the loan or other credit agreement.

It doesn’t mean you are responsible for half of the debt, it means you are responsible for all of the debt and it is up to you to take your ex-partner to court to recoup your losses, if that’s what you want to do.

The lender must have a copy of the agreement that is required under the consumer credit act in order to come after you for the money and if your name is on it, you will be liable.

Can You Lose Your Home

Not always, but if you declare yourself bankrupt, there’s more than a good chance your home will be sold to pay off a number of your debts.

Other debt plans such as an individual voluntary agreements or a debt management plan will allow you to keep your home, but you will need to repay your debts.

You do however run the risk of repossession if any debts are secured on your home whether you have offered a repayment plan or not; although most courts would refuse repossession a number of times if you demonstrate willingness to repay your debts.

What are the Most Important Debts to Repay

If you have a million and one debts, people and savings you’ve raided or just too many to realistically pay off any time soon, it could be worth you concentrating on those debts that are most important.

Although, it’s wise to try and pay at least a little bit off as many as you can, or at least make token payments. If you can only pay some, make sure you pay these first and approximately in the following order.

Payment Priority Order

  1. Mortgage/rent
  2. Any loan secured on your home
  3. Tax debts
  4. Court fines from a local magistrate
  5. Utility bills
  6. Agreements for support through the CSA or maintenance
  7. CCJs
  8. Unsecured debts

In reality and in a perfect world, you should pay something off all of these debts, but if you need to choose then you should work from number one downwards. The courts will give you some leeway if you are paying your priority debts and demonstrating a desire to solve your problems.

There are only so many chances you will get with any court. So if you have been lucky enough to survive a court appearance without the magistrate making orders for repossession of your home, then you need to focus on committing your next few months or even years to removing debt from your life.

What if You Can’t Manage Any Significant Payments

You should really explore your options and consider a debt management plan or debt relief order, or whatever suits your predicament. The UK government has recognised people are struggling with little hope of living a normal life because of high levels of debt.

With this in mind the government acted by implementing routes out of debt accessible by everyone. You should seriously consider talking to a professional for advice if you are finding things too difficult and any advice given should be free of charge. (See the Citizen Advice Bureau for a start.)

Abel Froman is a blogger who has been professionally counselling people who suffer with debt for many years and the one question he hears more than any other is “How do I get out of debt?” Hopefully this post will go some way to answer this popular question.

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