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Priority debts

Priority debts or why it’s important to pay some debts before others

A debt is a legal obligation to repay a sum of money. Borrowing money results in a debt. Failure to pay a legal obligation, such as a tax or court order, also results in a debt.

Debts with more severe consequences for non-payment are called priority debts. It is always advisable therefore to pay priority debts first from available resources.

How to identify priority debts

Priority debts include:

  • Central government debts, such as income tax, national Insurance, VAT, payments owing to the Department for Work and Pensions or HM Revenue & Customs
  • Court fines
  • Council tax
  • Child maintenance
  • Gas and electricity bills
  • TV licence
  • Mortgage or other loans secured against your home, rent
  • Hire purchase agreements, only if the item purchased is essential

Possible ultimate sanctions include:

  • A summons to court
  • Being made bankrupt
  • Bailiffs taking away items to raise money
  • Repossession of your home in the case of failure to pay mortgage instalments or rent
  • Having gas or electricity cut off following unpaid gas or electricity bills

Non-priority debts include:

  • Current account overdrafts
  • Bank or building society loans
  • Credit cards or store cards
  • Loans arranged by stores or catalogue companies
  • Payday loans
  • Money lent by family or friends

Possible ultimate sanctions include

  • A court order to pay
  • Bailiffs taking away items to raise money

Non-payment is also likely to make it harder and more expensive to borrow money. For more detailed information, see Citizens Advice national website.

If you have debt worries, call us on our freephone 0808 278 7834 

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