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.