Liabilities Review

What type of debt do you have?

You need to understand the nature of your debt. By this I mean that some of your debt might be deemed long term – like the mortgage on your home, often paid off over twenty to thirty years or so; some might be medium term – such as loans on replacement windows, a car or a caravan which you generally clear in two to five years; and other debt might be short term – like a bank overdraft, credit cards and store cards and these should normally be paid off well within a couple of years. It is often the short term debt – especially credit and store card debt - that causes the most debt problems.

• Are you in arrears on any of your domestic bills? Give priority to paying those bills that keep a roof over your head - mortgage, rent, utilities, council tax - and those that are the result of any court order.
  
  
• Are you in arrears on any of your borrowing? Priority should be given to paying these.
  
  
• Are you 'maxed out' on any of your store or credit cards? Check out the section on get out of debt plans for credit and store cards.
  
  
• Have you taken out extra borrowing to enable payments on existing loan agreements?
  
  
• Are you paying 'over the odds' for your credit arrangements?
  
  
• How long will it take you to pay off what you owe at your current rate of repayment?
  
  
• If interest rates were to rise, could you afford the increased loan repayments?
  
  
• For your personal loans, calculate the total amounts repayable over the term of each loan
  
  
• Draw up a list of all your credit and store card debts with the most expensive, in terms of the interest rate, at the top. Then the next most expensive and down the list to the cheapest (perhaps not the most appropriate word in respect of credit card interest rates, but I'm sure you get my drift!)
  

Income Review

Assets Review

Expenses Review