When you owe money it can be a daunting prospect, but the first step is to understand which debts are the most important to repay. These aren’t always the largest debts, the debts with the highest interest rate or from the lenders who shout the loudest. They are the debts that if you don’t pay them, you could end up in Court, losing your home, or being declared bankrupt. These are sometimes referred to as priority debts.
Is my Nemo mortgage a priority debt?
Your Nemo mortgage is secured against your property and is therefore classed as a priority debt. It is important to pay both your first charge mortgage and Nemo second charge mortgage to ensure you do not lose your home.
Work out your budget
You can use our free Budget Planner to help you work out your budget. The benefits of completing a Budget Planner are:
- It’s the first step in managing your finances
- It allows you to stay in control of your finances
- It helps you prioritise the most important debts and bills
- You can see where your money goes and where you can cut back
- It helps you budget for unexpected bills
- You can ensure that any offer you make is realistic, affordable and sustainable
Guide to completing the Budget Planner
- To convert weekly amounts into monthly, multiply the weekly figure by 52 and divide by 12
- To convert four weekly amounts into monthly (for example, benefits payments) multiply four weekly figure by 13 and divide by 12
- To convert fortnightly payments into monthly, multiply fortnightly figure by 26 and divide by 12
- The Budget Planner is based on MONTHLY figures. All quarterly or annual items (for example car tax, TV License fee) should be converted to monthly
- If you're not sure of an amount for something which might vary (like utility bills) try and take a monthly average based on the whole year
- If you are in an arrangement to pay arrears on priority debts, for example, your first mortgage, please include this increased amount
- Your Disposable Income sum (in the ‘MONTHLY SUMMARY' section) should first be used towards the clearance of arrears outstanding for Priority Expenditure items. Any remaining sums should be used to make payments to your unsecured creditors and for your Non-Priority outgoings