3. Different types of debt

Paying your mortgage should be the number one priority as you need to keep a roof above your head. If you are worried about falling behind on your repayments and need mortgage arrears advice, it’s best to stay calm and speak to your lender about what options are available to you. If you don’t, you could be at risk of losing your home.

You should complete an Income and Expenditure form to work out what you can afford, then ask your lender whether you can take advantage of a payment holiday or set up a repayment arrangement to get you back on track until your financial situation improves.

Similar to a mortgage, it’s important to keep up with your rent so you can continue to live in your property. If you find you are struggling with rent arrears, be honest with your landlord if you rent privately, or with the Housing Association and explain your financial situation to them – it’s in their interest to help and get you back paying your rent.

If you do find that you are unable to keep up with your rent, or if your landlord wishes for you to move on, speak to your local council to find out if there is additional support available to help with housing costs.

If you are struggling to pay a court fine, you will find details of where to contact for help on the ‘notice of fine’ letter sent to you from the court. Read this carefully and when you do ask for help, be honest with them and explain why you are unable to pay your fine. You may be given permission to pay your debt in installments or at a later date.

It’s important to keep up with your council tax repayments, as this money goes towards your local services. If you can’t keep up with council tax arrears, it’s best to get to get in touch with your council to see if you can make an arrangement – like making smaller payments.

If you don’t keep on top of payments, councils can charge you for the whole year in one go if you don’t pay within 7 days of being asked. Remember, if you live on your own or claim benefits, you may be eligible for a reduced council tax bill, so speak to your council today to find out more.

Child maintenance payments help with the everyday costs of bringing up your children. If you’re having trouble paying your Child Maintenance, get in touch with the CSA (Child Support Agency), who will be able to walk you through your options.

If you have been paid too much in benefits, you will be asked to pay this back – this is classed as a priority debt. If you feel you have been overpaid, you should flag this with your benefits office and ask for an explanation as to why this happened, so you can correct your benefit income.

If you cannot afford to pay your essential living costs and debt repayments, you should contact the DWP’s Debt Management contact centre on 0800 916 0647 and explain your situation.

If you have purchased a vehicle or essential product on hire purchase, then you may deem this as a priority debt. It’s important you keep up with the repayments on a hire purchase, so you don’t receive a default notice and lose the asset attached to it.

If you cannot keep up with your hire purchase agreement, your creditor is likely to contact you and request payment. If you cannot pay, you should contact the creditor and ask for a payment holiday or repayment arrangement until you can improve your financial situation.

Penalty charge notices are issued by local councils and issued for breaking traffic rules (like driving in a bus lane) or, in London, failing to pay London congestion charges. If you feel a charge is unfair, you can challenge it by writing a detailed appeal letter to the body that issued it to you.

It’s important to know that you’ll usually only have to pay 50% of the charge if settled within a set period after its issue, so if you can pay then do so sooner to pay less. If you cannot pay a penalty charge notice and feel the charge is fair, you should review your budget and make sure you are claiming all the benefits you are entitled to in order to raise funds.

If you watch live TV, then you will need a TV licence. To help suit your budget, you can pay for a licence annually, quarterly, monthly, fortnightly or weekly. If you are struggling to pay for your TV licence, you should visit the TV Licencing website and see whether you are eligible for a discount.

Keeping your home heated and lit is essential to everyday life, which is why it’s essential to paying your utility bills in full and on time. If you feel you are paying too much for your gas and electricity bills, you should use PayPlan’s Bill-Busting Guide, where you can compare and switch in a few clicks.

If you cannot switch for a better deal (which will be the case with your water bill) then you should write to your utility provider and ask for a payment holiday or arrange a repayment plan. You may also want to consider getting a smart meter fitted so you can keep on top of what you use and this may help with cutting back.

If you cannot pay your contract debt, you will need to act quickly to keep on top of it. You should contact the creditor straight away to make sure you don’t fall behind on your payments and incur charges to your account.

Be honest with your provider and see if you can take a payment break or set up a repayment arrangement until your financial situation improves. You may be able to enter a new contract and pay less each month over a longer period of time – just make sure you can afford the commitment.

If you are coming to the end of your phone or internet contract, use PayPlan’s Bill-Busting Guide, where you can compare and switch to a better deal in a few clicks.

An unsecured loan – or consumer credit – is leant to you in order to purchase goods or services. Lenders will look at your creditworthiness before lending to you, to make sure you can afford the repayments.

Examples of consumer credit include credit card debts, overdrafts, catalogue debts, logbook loans, store cards and buy now pay later schemes. When you take out consumer credit, you will be expected to repay your debt with interest attached. It’s important you keep up with your agreed repayments, otherwise you may face further interest and fines which will lead to larger overall debt repayments.

If you cannot afford to repay consumer credit, you should speak to your lender immediately to see what your options are. You may be allowed to spread the cost over a longer period of time or enter into a repayment plan to help you pay back your debts.

If you have taken a loan from friends and family, the arrangement is likely to be informal and you will probably only pay back what you borrowed. If you are struggling to pay back a debt to somebody close to you, the best thing to do is to be honest and tell them why you can’t pay back what you owe. You may be able to work out a budget together and come to a mutual agreement – you won’t want a relationship to breakdown over money.

If you have borrowed from a loan shark and can’t afford to pay back your debts, you should be careful as some of these lenders have been known to use intimidation to get their money back.

Loan sharks operate illegally, so you are under no legal obligation to pay the debt back at all. However, you should report a loan shark if you feel you are worried at any point. Stay alert and work out a budget so you can deal with future money problems yourself or seek help – like payment breaks or breathing space – from your existing creditors.

A payday loan is a short term, unsecured loan to help cover month-to-month expenses. You should be wary of high interest rates attached to payday loans, as these could result in increased repayments down the line.

If you cannot pay back a payday loan, you need to make sure you don’t take out another loan to cover what you owe – this could put you into a debt spiral that is tricky to get out of. Next, you should contact your bank and cancel the Continuous Payment Authority (CPA) attached to the payday loan – this means the lender won’t be able to take money out of your account as and when they need it.

Once the CPA is cancelled, you should write to the payday lender and tell them you have taken this action, then try to work out a repayment plan with the lender to pay back what you can – this may be over a longer period of time.

Private parking tickets are issued for overstaying in places like supermarkets, hospitals or other private car parks. If you cannot afford to pay a private parking ticket, you should write to the company who issued the ticket and see if you can either spread the cost or make an offer of payment

You may be able to contest the fine if you feel it is unfair, so provide evidence if you feel this is the case. If you do feel the fine is fair, you may need to try and cut back for that month and pay the fine before the fee increases or they start action at the small claims court.

If you cannot afford a water bill, your water won’t be turned off. However, you should try to pay what you owe back before the water company chase you for payment and discuss court action.

The best thing to do to tackle a water bill is to make sure you budget effectively and claim all the benefits you are entitled to. If you do claim benefits, you may be eligible for deductions on your bill, so find out what you are entitled to and speak to your water supplier as soon as possible.

If you are self-employed or run a small business, then you may have business debts.

Business debts can also apply to people who have a buy-to-let property, limited company, business partnerships, are in the gig-economy or sole traders.

If you have taken out a credit agreement, such as a loan or bank account in joint names then both people are liable for the full amount of any debt. This is known as joint and several liability.

Divorce can also have a major impact on joint debts. Cost of divorce proceedings and change of lifestyle can all add to the pressure.

Repayments for student loans are only required when you start work and earn more than a threshold figure.

For the latest information on repayments, visit the student finance section on the government website.