Ways To Pay Off Debt

Debt Management Guide 2: Prioritise Creditors

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Debt Negotiation Guide:

Stage One
Contact Creditors

Stage Two
Prioritise Creditors

Stage Three
Financial Statement

Stage Four
Make Offers




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Ways To Pay Off Debt:
Prioritise Your Creditors

See Also: Recommended Guides For
How To Negotiate Debt Settlements

Or Apply For Debt Management Help Now By Completing The Online Form At The Bottom Of This Page

The route chosen by most people who get into financial difficulties is to use one of the more reputable debt management plan providers to help them deal with their debt problems. What they will do for you is negotiate with your creditors to try to arrange more affordable payment terms. If you prefer to do this yourself, this guide will help you to do that.

Assuming you do not have enough money to pay off all your creditors, you need to decide which ones are important to pay, and which ones can wait. This is an important part of managing your debt. When you have all the replies to your letters, you should then put each creditor into an appropriate priority list. The priority does not depend on how much you owe or how nasty their letters are, it is about the possible consequences of not paying them.

You need to split them up into two lists: Priority Creditors and Secondary Creditors.

Ways to Pay Off Debt - Priority Creditors:

These are simply the creditors where there are the most serious consequences if you do not repay them. Think of the ones where non payment could result in being sent to prison, losing your home or losing essential goods or services.

Examples of Priority Creditors:

Ways to Pay Off Debt - Secondary Creditors:

These are the debts you have that do not carry such drastic legal consequences if they are not paid promptly.

Examples of Secondary Creditors:

This does not mean that you do not have to pay these creditors. You will need to make offers to pay what you can afford (see Stage 4). If you don't make an offer to pay they can take you to court.

For problems with secondary, or unsecured debts, you can get help from a debt management company if your debts are above a certain amount.

It is important that you get this priority list correct. You can't afford to pay anything that is not absolutely essential, and you can't afford not to pay for things where non-payment carries such serious consequences.

If you prefer more detailed guidance on the process of how to negotiate with creditors to write off a large part of your debts, please refer to the page on how to Learn Debt Negotiation


Go to the next stage in your guide on Ways to Pay Off Debt, which will show you how to create your own Personal Financial Statement.





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Your home may be repossessed if you do not keep up repayments on a mortgage, loan or any other debt secured on it. Think carefully before securing other debts against your home.