Debt is when you owe someone money – either when you borrow money and agree to pay it back later, or by buying something with the agreement to pay later.

Sometimes if you do not pay a debt by the due date it may be lodged with a debt collection agency. The debt collection agency will then contact you to make an arrangement for you to repay the debt.

If a debt collection agency becomes involved it will affect your credit rating making it harder for you to borrow in the future.

In extreme cases the debt collection agency can obtain a court order to acquire your assets (such as your house or car) or take some of your wages in order to pay your debts.

Never get a loanfor someone else – even if they are your boyfriend, girlfriend, husband, partner or family member. You cannot guarantee that that person will pay all the money back and you may end up being liable for the full amount.