Priority and non-priority debts

When you are in debt, some debts should always be paid first. Knowing which debts should take priority can help you to keep your home. It’s important to understand what happens if you don’t pay.

Priority debts

Some debts are called priority debts because if you do not pay them you could face serious consequences. Priority debts should always be dealt with BEFORE your non-priority debts.

Priority debts include:

  • mortgage repayments and loans secured on your home
  • rent
  • gas and electricity debts
  • council tax
  • certain payments ordered by the courts.

Child support and maintenance payments are also considered priority debts, as are payments for your TV licence.

There are serious consequences if you don’t pay a priority debt. For example you could:

  • lose your home through mortgage or rent arrears
  • face action by enforcement agents (previously known as ‘bailiffs’)
  • have your gas or electricity supply cut off, or have to accept an expensive pre-payment meter instead
  • 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 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 take enforcement action against you if you do not pay them. This could result in your debt being passed on to a debt collection agency and a county court judgment (CCJ) being made against you. A CCJ could affect your credit rating.

Non-priority debts include:

  • credit card debts
  • some hire purchase agreements (HP)
  • unsecured bank and payday loans (loans that are not secured against your property)
  • water bills
  • loans from friends and family.

If you have a CCJ made against you, you must keep to the terms of the court order. If you don’t, for example you fail to pay a certain amount each month, your creditor can 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 send enforcement agents (previously known as bailiffs) to seize your non-essential goods, or make you bankrupt. If you are a homeowner, this could result in you losing your home.

If you have a payday loan, or are thinking about getting one, use the Money Advice Service payday loan tool to see if it is right for you.

Get help with debt problems

For more information about priority and non-priority debts, contact a specialist debt adviser.

Use the Money Advice Service budget planner to help you organise your finances and prioritise your debts.

Phone an adviser

If you have a housing problem, call our expert housing advice helpline
0345 075 5005

Email an adviser

If you have a non-urgent problem and would like to speak to an advisor
email us

This page was last updated on: July 9, 2018

Shelter Cymru acknowledges the support of Shelter in allowing us to adapt their content. The information contained on this site is updated and maintained by Shelter Cymru and only gives general guidance on the law in Wales. It should not be regarded or relied upon as a complete or authoritative statement of the law.