Priority Debts
The law states that some debts are more important than others and give creditors different options to recover their money. These are called priority debts and should always be dealt with and paid before less important non-priority debt. (Always check any insurance cover re: priority debts).
Examples of Priority Creditors
- Rent / mortgage / secured loans / charging order (loss of home)
- Council Tax (attachment of earnings / bailiffs / prison / bankruptcy)
- Magistrates Court Fines (bailiffs / prison)
- Electricity / Gas (pre-payment meter / disconnection)
- T.V. Licence (fine / prison)
- Income Tax (bailiffs / bankruptcy / other)
- Hire Purchase (loss of car / goods)
- Child Maintenance (attach to earnings / bailiffs / prison)
- Court Judgments (attach to earnings / charging order / bailiffs)
- Telephone (disconnection)
If you have problems with priority creditors, don't wait for arrears to mount up or for legal action to commence, contact them as soon as possible (examples below). You may need to draw up a detailed income/expenditure form (Financial Statement) outlining your offers - see the CABmoney Budgeting & Debt Calculator for information and help with a Financial Statement.
- Mortgage / secured loans: Contact your lender to discuss options / try to come to a long term or temporary arrangement / arrangement / offer the normal monthly payments plus an affordable amount to clear your arrears. Check any possible DWP mortgage interest payment entitlement. If you are facing repossession / eviction / homelessness or not sure about anything get specialist advice & assistance.
- Rent: Contact your landlord and try to come to an agreement / offer the normal monthly payment plus an affordable amount towards any arrears / check any housing benefit entitlement. If you are facing possession / eviction / homelessness or you are not sure about anything get specialist advice & assistance.
- Council Tax: Contact the relevant local authority and offer an amount on top of your normal payments before an application for a liability order is made (check any council tax benefit entitlement) If a liability order has been obtained you may still be able to negotiate with the local authority and discuss options before further recovery action is taken. If your accounts have been passed to the bailiffs you will need to contact them with an offer of payment or ask the local authority to take back the account back. Where applicable an offer of payment be taken direct from your from your benefits may be accepted. If threatened with a charging order / bankruptcy or you are not sure about anything get specialist advice & assistance.
- Charging Order: Check application papers / contact the relevant creditor and try to make an arrangement / attend final charging order court hearing / make application to vary any payment order / if you are threatened with an order for sale or you are not sure about anything get specialist advice and assistance.
- Magistrates Court Fines: Contact the relevant court to discuss options / make an affordable offer of payment or request for a means enquiry hearing. If bailiffs are involved, contact with offer of payment / if threatened with imprisonment or you are not sure about anything get immediate specialist advice & assistance.
- Electricity / Gas: Contact your supplier and offer an amount on top of your current usage costs. Other options are: request a pre-payment meter or offer a payment taken direct from your benefits if applicable. If you are threatened with a magistrates warrant for disconnection or not sure about anything get specialist advice.
- T.V. Licence: Contact TV Licensing regarding various payment schemes (0870 241 6468)
- Tax/VAT: Contact HM Customs & Excise and try to come to an arrangement / discuss options / if threatened with bankruptcy or you are not sure about anything get specialist advice & assistance.
- Hire Purchase / Conditional Sale: Contact lender and try to come to an arrangement / offer normal payments plus amount to clear any arrears.
- Child Maintenance: Contact Child Support Agency and co-operate fully / where liability order, charging order / order for sale / and other enforcement action threatened get specialist advice.
- Court Judgments: Complete court forms with offer and return within time limits / apply to vary current payment order / make an application to suspend a warrant of execution and reduce payment order.
- Telephone/Internet: Contact provider try to come to an arrangement / offer normal payments plus amount to clear any arrears.
If you require in depth advice and information on dealing with priority debts (including court hearings, eviction & bailiffs) there are a number of fact sheets on our website covering these issues. Alternatively, you can contact the bureau for further advice.
Please see the "What are my options?" section for further in depth advice and information on dealing with your creditors and debts.
What does this mean?