Debt Assistance For Tenants

The number of people struggling with debt is on the increase and tenants are no exception. Before seeking assistance from creditors, debt management companies or consumer organisations, it is worth understanding the total size of your debt by calculating the amounts of money owed to creditors. For example, you may have credit cards, store cards, catalogues, bank overdrafts, private landlord or council rent arrears, personal loans, car loans and money owed to friends and relatives.

For tenants who find themselves in debt and are struggling to meet their financial commitments the consequences of not paying certain debts are outlined below. Some debts are deemed more important than others and not necessarily because of the amounts owed. Many regard debt in the form of loans or overdrafts, however, if you fail to pay parking offences or your local council tax, this is regarded as a debt whether you agree with its imposition or not.

Most council or private tenants rent their room or property from a landlord. If there are serious rent arrears, the landlord could evict you and possibly leave you homeless. If the fuel supply to the property for which you are renting is disconnected, this could be as a result of you not paying the bill, for which you maybe responsible. Failure to pay Government taxes such as income tax or VAT may result in court action resulting in bankruptcy or imprisonment. Bailiffs may be instructed by courts to repossess your goods if fines imposed by the Police, or council taxes remain unpaid. If you have recently purchased an essential item on Hire Purchase Credit such as a car or motorbike which you use to travel to work, this may be repossessed if you fall behind with the loan repayments.

Priorities!

Failure to pay the minimum amounts required by credit cards, catalogues, overdrafts and non essential hire purchase loan agreements are regarded as less important than those mentioned above for the reason that you are unlikely as a tenant to lose your home or end up in prison, however, this does not mean creditors will take not court action resulting in bailiffs repossessing your goods or imposing further fines.

Once you have prioritised your debts, consider your total income and expenditure to identify which debts you may struggle to pay off on time. The next course of action could be to discuss your problems with your creditors who may be prepared to offer payment holidays or accept reduced loan payments over an agreed term. Alternatively, there are organisations such as debt management companies and consumer non profit organisations such as National Debt Line and Money Advice Scotland who can offer specialist advice in these circumstances and it may be worth your while to contact them. Information on Individual Voluntary Arrangement, (IVA).

Usually debt management companies will only assist with non-priority debts and some companies may charge a fee. The advantages of using a debt management company is that they are efficient telephoned based services that are quick and often anonymous. Many users of debt management services also like the fact that their debts are managed by professionals who can negotiate competently with creditors. There of course disadvantages such as the fact that some creditors refuse to deal with debt management companies, there are possible fees to pay which leave you with less funds to pay off the long term debt. Some companies may also require security in the form of assets such as a house or car.

To Summarise

Identify your total debts by calculating what is owed to your creditors and then prioritise what is important. Then consider a course of action which could be negotiating direct with creditors, or seeking advice from free consumer advice organisations, or consult a debt management company.

Please Note! YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. ALL SECURED OR UNSECURED LOANS ARE SUBJECT TO STATUS. SECURED LOANS ARE SECURED ON PROPERTY.

© uk-property-business-plan.co.uk Resources Resources2