When there isn’t enough money to go round, the order you pay things in matters. Debt advisers sort debts into priority and non-priority, based on what could happen if you don’t pay.
The short answer
- Priority: rent, mortgage, council tax, gas and electricity, court fines, child maintenance, TV licence, HMRC, hire purchase on essential goods.
- Non-priority: credit cards, personal loans, overdrafts, catalogues, buy now pay later, payday loans.
- Non-priority creditors may threaten action, but the consequences are usually less severe.
- Paying the creditor who shouts loudest isn’t always right.
- Debt solutions mainly deal with non-priority debts.
Why are some debts a priority?
Not paying a priority debt can lead to eviction or repossession, disconnection, bailiffs, losing goods you need, or in rare cases prison (for court fines or council tax in England). That’s why they come first, even when other creditors are pressing harder.
What counts as a priority debt?
- Rent and mortgage, plus secured loans on your home
- Council tax
- Gas and electricity
- Magistrates’ court fines and child maintenance
- TV licence
- Income tax and VAT owed to HMRC
- Hire purchase or conditional sale on goods you need, such as a car for work
What should I do about non-priority debts?
Once your priority bills are covered, offer what’s left fairly to your other creditors. If that isn’t enough, a debt management plan, IVA, DRO or bankruptcy may help. Use a budget to see what you can afford.
Common questions
Is a credit card a priority debt?
No. Credit cards are non-priority debts. The creditor can take court action, but you won’t lose your home or essential services directly.
Is water a priority debt?
Water is usually treated as a lower priority than energy, because household supplies can’t be disconnected. You should still pay it if you can.
Should I use a credit card to pay my rent?
It can turn a priority debt into a more expensive one. Get free advice before borrowing to pay priority bills.
Getting help
You don’t have to deal with debt on your own. Free, impartial advice is available from MoneyHelper, StepChange and National Debtline. If you want to talk through whether a formal solution such as an IVA could be suitable, you can also get in touch with us.