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Priority Bills and Debts

Why it’s important to pay off debts in the right order

The consequences of not paying off some debts before others can be more serious.

So, if you’re struggling to make your repayments on time, you need to look at all your debts and split them into:

  • priority debts
  • non-priority debts

What are priority debts?

Priority debts are those that carry the most serious consequences if you don’t pay them.

These don’t have to be the largest or debts with the most expensive interest rates, but if you don’t pay them it could lead to serious problems.

Priority debts include:

  • Rent arrears
  • Mortgage arrears or secured loan arrears
  • Council tax arrears
  • Gas or electricity bills
  • Phone or internet bills
  • TV licence payments
  • Court fines
  • Overpaid tax credits
  • Payments for goods bought on hire purchase or conditional sale
  • Unpaid income tax, National Insurance or VAT
  • Unpaid child maintenance

Why you should pay off priority debts first

The consequences of not paying off priority debts could be:

  • being visited by bailiffs
  • receiving a court summons
  • being made bankrupt – because you haven’t paid your bills
  • having your heating or lighting cut off – because you haven’t paid your bills
  • losing your home – because you’re not keeping up with mortgage or rent payments.

What are non-priority debts?

The consequences of not paying non-priority debts are less serious.

If you don’t pay non-priority debts, your creditor could eventually take you to court or instruct bailiffs to collect money from you.

Your non-priority debts include:

  • overdrafts
  • personal loans
  • banks or building society loans
  • money borrowed from friends or family
  • credit card, store card debts or payday loans
  • catalogue, home credit or in-store credit debts.

Water and sewerage bills

Your water and sewage cannot be cut off in the same way as your other bills like electricity. But as an essential household bill, it’s worth considering alongside your other priority bills before other non-priority debts.

If you don’t pay at least your current water and sewerage bills, the amount you owe will continue to go up and eventually your water company could take enforcement action to recover what you owe.

Treating creditors fairly

It’s a good idea to talk to our Money Matters team before you agree to make payments to people you owe money too.

There are rules to follow if you have several debts and spare money to start paying them off. Anything you can afford to pay towards your debts must be shared out fairly between your creditors.

It’s important you do this because if you don’t manage to keep up with repayments and need to find a formal debt solution, you may not be able to enter into some arrangements, (such as bankruptcy or a debt relief order) if you have prioritised certain creditors over others.

Is your household income getting squeezed?

If you’re facing higher living costs, but have little or no extra money coming in, find out about extra sources of income and support available to help you manage your household bills.

Get free advice about dealing with debts

Don’t struggle with debts – particularly if you’re facing an emergency, such as losing your home or going to court.

If you need more support or don’t know where to start paying off debts you’re not alone.

Our dedicated Money Matters team are here to help:

We will:

  • treat everything you say in confidence
  • never judge you or make you feel bad about your situation
  • suggest ways of dealing with debts that you might not know about
  • check you have applied for all the benefits and entitlements available to you
  • always make sure you are comfortable with your decision.