Stage 3: Identify which are priority debts
Priority debts are those which, if not paid, could cause you to lose your home, fuel or liberty.
Priority debts include:
- Mortgage arrears
- Second mortgages/secured loans
- Ground rent/service charges
- Rent arrears
- Council tax
- Gas and electricity bills
- TV licence
- Magistrates’ Court fines
- Parking penalties
- Income Tax and VAT arrears
- Child maintenance
- Social Fund loans
- Benefit overpayments
- Tax Credit overpayments
- Hire purchase or conditional sale agreements for essential items.
You will always be given a warning before any action and will have the chance to respond. Do so as soon as you can. You will usually be able to stop the loss of your home or other essentials.
Non-priority debts
Non-priority creditors do not have the strong powers of priority creditors. A non-priority creditor must get a county court judgement before they can take any further legal action against you.
Non-priority debts include:
- Credit cards
- Store cards
- Charge cards
- Mail order catalogues
- Money lenders
- Water arrears
- Unsecured bank loans
- Unsecured overdrafts.