Priority Debts
The law states that some debts are more important than others and give creditors different options to recover their money. These are called priority debts and should always be dealt with and paid before less important non-priority debt. (Always check any insurance cover re: priority debts).
Examples of Priority Creditors & Recovery Action
- Rent / mortgage / secured loans / charging order (loss of home)
- Council Tax (attach to earnings / bailiffs / prison)
- Magistrates Court Fines (bailiffs / prison)
- Electricity / Gas (pre-payment meter / disconnection)
- T.V. Licence (fine / prison)
- Income Tax (bailiffs / bankruptcy / other)
- Hire Purchase (loss of car / goods)
- Child Maintenance (attach to earnings / bailiffs / prison)
- Court Judgements (attach to earnings / charging order / bailiffs)
- Telephone (disconnection)
If you have problems with priority creditors, don't wait for arrears to mount up or for legal action to commence, contact them as soon as possible (examples below). You may need to draw up a detailed income/expenditure form (Financial Statement) outlining your offers - see the NEDCAB Debt Management Plan further on in this guide for assistance regarding Financial Statements.
- Rent / mortgage / secured loans / charging order: contact your lender or landlord and offer full contractual payments plus a monthly amount to clear your arrears over a suitable period (for mortgage arrears there are also schemes such as Mortgage Rescue)
- Council Tax: contact the local authority involved and offer an amount on top of your normal payments to clear your arrears within the current tax year. If your accounts have been passed to the bailiffs you will need to contact them with an offer of payment or ask the local authority to agree to an attachment of earnings order or deduction from benefits
- Magistrates Court Fines: contact the relevant court with a realistic offer of payment or request for a means hearing. If bailiffs are involved, contact with offer of payment
- Electricity / Gas: contact your supplier and offer an amount on top of your current usage costs. Other options - request a pre-payment meter or deduction from benefits.
- T.V. Licence: contact TV Licensing regarding various payment schemes (0870 241 6468)
- Income Tax: contact Inland Revenue and offer payment plan or discuss options
- Hire Purchase: contact lender and offer normal payments plus amount to clear arrears
- Child Maintenance: contact CSA and cooperate fully. If bailiffs involved, offer payment plan
- Court Judgements: complete court forms with offer or apply to vary current order
- Telephone: contact provider and offer normal payments plus amount to clear arrears
If you require in depth advice and information on dealing with priority debts (including court hearings, eviction & bailiffs) there are a number of fact sheets on our website covering these issues. Alternatively, you can contact the bureau for further advice.
Useful Links
- Shelter Free Housing Advice Helpline
0808 800 4444 - National Energy Action
Includes Fuel Poverty Action Guide - Court Judgements Information
- Citizens Advice: Adviceguide
Next: Non-priority debts are briefly explained.