Priority and non-priority debts
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
When you are in debt, it’s important to know which debts should be paid first. Knowing which debts should take priority can help you to keep your home, prevent your services from being disconnected and even keep you out of prison. It’s important to understand what happens if you don’t pay.
Priority debts
These debts are called priority debts because the consequences of not paying are so serious. Priority debts should be dealt with before your non-priority debts.
Priority debts include:
- mortgage repayments and loans secured on your home
- rent
- fuel debts
- child support and maintenance payments
- council tax
- TV licence payments
- certain payments ordered by the courts.
if you don’t pay a priority debt:
- you could lose your home through mortgage or rent arrears
- your gas or electricity supply could be cut off, or you may have to accept and expensive pre-payment meter instead
- you could lose belongings on hire purchase such as a car, furniture or other goods.
You could go to prison if you don’t pay your council tax, TV licence, taxes or magistrates court fines.
Non-priority debts
Failing to pay non-priority debts is usually less serious than not paying a priority debt. However, your creditors (the people that you owe money to) may sue you for any money that you owe them - this could result in a county court judgement against you.
Non-priority debts include:
- credit card debts
- hire purchase agreements (HP)
- unsecured bank loans - loans that are not secured against your property
- water bills
- loans from friends and family.
If a creditor gets a county court judgement against you and you don’t keep to the terms of the court order, (for example, you fail to pay a certain amount each month) your creditor can then go back to court and apply to enforce the debt. Depending on the amount of the debt and your circumstances, your creditors could ask the court to:
- make you bankrupt – if you are a homeowner, this could result in you losing your home, or
- send bailiffs to seize your non-essential goods.
Get help with debt
Use our budget calculator to help you organise your finances and work out which of your debts are non-priority debts. For more information about managing your debt, contact a specialist debt adviser.
