The consequences of failing to pay your debts are far-reaching and may affect your future.
What are the consequences of not paying your debts?
Apart from the anxiety you may experience, debt may have dramatic real-world consequences. These may include:
Fortunately, there are things you can do to help you get on top of your debts.
Prioritising your debts
The first step towards financial freedom is getting on top of your debts and knowing how prioritise them. Of course, we all see debts differently and have different ideas about what’s most important. We suggest you gather the paperwork for each debt and separate the debts into 2 piles; ‘Priority debts’ and ‘Non-Priority debts’.
Priority debts are those where non-payment will have serious consequences. For instance, if you don’t pay your rent you may be evicted from your home or if you don't pay your electricity bill your home may be without power.
Non-priority debts are still important but you may simply incur a late fee, or have your service suspended if you cannot pay on time. You may like to consider cancelling or postponing non-essential services until your situation improves.
What options exist?
Unless creditors know about your situation, they can’t help. So, contact them as soon as possible and explain your situation. They are legally obliged to consider your request for leniency due to financial hardship.
Electricity is an essential service that most households rely on daily. To help you keep the lights on, you can apply for a Home Energy Emergency Assistance Scheme grant. The Scheme can help by paying a portion of your energy bill.
You can also call the National Debt Helpline on 1800 007 007 and talk about your options with one of our Financial Counsellors.
Your car is at risk of being repossessed
Car repossession is traumatic and can affect your work, earning potential and family. Know what to do if you can't keep up with your loan repayments.