Debt
What are the different types of debt?
Priority and non-priority debts
Priority debts - include rent or mortgage arrears, gas and electricity debts, council tax arrears, county court judgments (CCJs) and fines imposed by the Magistrates Court.
Debts to the University may be priority debts if they stop you progressing on your course. Priority debts should be paid before other debts. If you think you have priority debts contact the Student Advice Centre
Non-priority debts - include credit card and store card debts, overdrafts and most other credit debts. These should be paid when priority debts are dealt with.
What can happen if I do not pay my debts?
Ignoring any debt can result in the debt increasing as interest and charges are added. Your creditors can also take you to court. If a CCJ is made against you, you will have trouble getting credit in the future.
If your creditors are taking court action, it is not too late to negotiate or get advice. Not paying priority debts can result in losing services like gas and electricity, facing eviction proceedings from your home, or being imprisoned for non-payment of council tax or fines. If you owe money to the University you may be asked to leave your course. If this is happening to you, get advice.
Tips for dealing with debts
If you have one or two non-priority debts, you may be able to follow these steps yourself. If you have multiple debts and/or priority debts contact the Student Advice Centre.
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Stop using the source of credit.
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Keep in touch with creditors and keep them up-to-date with your circumstances.
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Check that you are getting as much income as you are entitled to. Are you receiving the full amount of student support you are eligible for? Can you extend your overdraft or look for a part-time job? If you are a parent or have a disability you may be entitled to welfare benefits. You can check this with a Student Advice Centre Guidance Worker.
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Use the Advice Centre Budget pages to do a budget to assess your financial situation, any money left over can be used to pay to creditors.
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Use the Self Help Pack to find out how to make an offer to your creditors.
The pack will guide you through the steps you need to take to negotiate with your creditors successfully confidently and will give you all the tools you need.
Before you do anything I would suggest you take a look at the glossary to familarise yourself with words and phrases you may hear from creditors and on these pages.