Understanding Priority and Non – Priority Debts
Beginning to get yourself out of debt can seem overwhelming as you don’t know where to
start but by identifying, with the help of an independent debt advice centre, the most important
important debts, this means you will be at less risk of losing your home or being cut off from
other services. These debts are called priority debts, they include:
- Mortgages – These are a priority as there are serious consequences of falling behind with payments as
you could lose your home. - Rent – An alternative to a mortgage but you could still lose your home.
- Council Tax – The council have lots of different ways to make you pay, they may try to use bailiffs, take it
from benefits or ultimately you could be sent to prison. - Secured loans (second mortgages, consolidating loans) – Like mortgages you could lose your home.
- Utilities – Payments on gas and electricity that you have missed in the past are considered a priority,
because you could be disconnected, the companies offer a number of alternatives to having your supply
disconnected. You can no longer be disconnected for not paying your water bill but as it is essential for the
running of your house hold it should be considered a priority. - Court fines and child support – There is a possibility of being sent to prison if you have to go back to court
for not making payments. - TV licence – It is a criminal offence to use a TV without a valid licence.
Some debts are not considered a priority because of the limited powers creditors have to
make you pay. Very often, however these creditors will threaten to do a number of things,
including taking you to court, using bailiffs, taking payments straight from your wages and
so on. The reason why the possibility of court action does not make something a priority
is that if you respond appropriately to court proceedings, the court can make orders that
help you.
Examples include:
- Credit and store cards
- Bank loans
- Overdrafts
- Money Lenders
- Hire Purchase Agreements
Sometimes, debts that would have been a priority no longer are. For example; owing rent on an old property as
it is no longer possible to be evicted, mortgage shortfall debts, utility debts to a previous supplier as you can
no longer be cut off.
It can be difficult not to consider a debt to a family member or friend as a priority because of the nature of
relationships, but be honest with the person and work out a payment plan. Could the debt be written off in
exchange for chores such as washing their car if it is a small debt? If this is not possible and the debt is
putting your relationship with this person at risk consider making payment of this debt a priority.
For more information see:
