Who gets paid first

If you are having difficulty paying the people to whom you owe money, you need to understand which debts you should give priority to paying first. The following examples will show you the difference between priority and non-priority debts.

Priority debts

Priority debts are where, if there is no payment, essential services could be taken from you by the person that you owe money to. Examples of priority debts are listed below.

Rent arrears

Once the rent account reaches arrears of eight weeks, your landlord will consider further action, which could ultimately result in the loss of your property.

Gas / Electric

Non-payment could result in the supply to your property being disconnected by the supplier. This could ultimately result in your day-to-day living being significantly disrupted.

Council Tax

If Council Tax is not paid, the council can take you to Magistrates Court to obtain a Liability Order. Your case can then be passed to a bailiff who will try and recover the money. If the bailiffs are unsuccessful the account will be passed back to the court for committal hearing. If you fail to attend, a warrant could be issued for your arrest with or without bail. You could ultimately be given a custodial prison sentence.

Other priority debts

Other priority debts include:

• Magistrates court fines
• parking penalty charges
• TV licence
• child support or maintenance arrears
• certain payments ordered by the court

If you have priority debts it is important that you negotiate repayments with your creditors as soon as possible to avoid them taking more severe action.

Non-priority debts

Non-priority debts are debts where, if there are no payments, it will not result in essential services being withdrawn by the creditor. However, you may be subject to a County Court Judgement. Some examples of non-priority debts are listed below.

Credit card

When there is a default on payments, although additional charges may accrue immediately, there will be no significant effect on the creditor. The process of a non-priority debt becoming a priority debt is lengthy in most cases.

As with other debts, it is still important to make contact to negotiate a payment arrangement at the earliest opportunity.

Catalogue

With this sort of debt, normally the account will be transferred to debt collection agencies with whom you can discuss reasonable offers of payment.

Other non-priority debts

Other examples of non-priority debts are:

• unsecured bank loans or overdrafts
• water rates
• personal loans with finance companies
• charge cards
• personal debts to friends/family
• doorstep collected loans
• Sky TV contracts
• mobile phones

If you are making arrangements to clear non-priority debts, you should also ask for interest and charges to be suspended on your account to ensure the debt does not increase.

Be aware that your credit rating may be affected if you have difficulty repaying a non-priority debt.

Page last updated: 2 November 2023