Understanding Priority and Non-Priority Debts
Some debts need to be dealt with immediately to avoid serious consequences. Others, while still important, don’t carry the same urgency.
April 23, 2025
Understanding Priority and Non-Priority Debts
When you’re juggling multiple debts, it can feel like every creditor is shouting for attention. The pressure builds, and it becomes hard to know where to start. At the Advice Centre Group, we’ve helped over 11,300 people find clarity in financial chaos—and one of the most important lessons is this: not all debts are created equal.
Some debts need to be dealt with immediately to avoid serious consequences. Others, while still important, don’t carry the same urgency. This blog will help you understand how to prioritise your debts effectively so you can take control with confidence.
All debts fall into one of two categories:
- Priority Debts: These are the debts that can lead to serious outcomes if unpaid. We’re talking eviction, court action, disconnection of essential services, or even imprisonment.
- Non-Priority Debts: These don’t typically result in immediate legal action, but ignoring them long-term can damage your credit score and financial future.
Let’s explore both in more detail.
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Priority Debts – These Come First
These debts should be your top focus. Here’s what falls under this category:
1. Mortgage or Rent Arrears
Your home is on the line. If you miss payments, landlords or mortgage lenders can initiate eviction or repossession.
2. Council Tax Arrears
Unpaid council tax can lead to court summons, enforcement agents, and even imprisonment in extreme cases.
3. Gas and Electricity Bills
Energy providers can cut off your supply if payments aren’t made. Payment plans are often available, but communication is key.
4. Water Bills
You can’t be disconnected in the UK, but unpaid water bills can still result in enforcement action.
5. Court Fines and Legal Penalties
These are enforced by the courts and carry severe consequences if left unpaid. Bailiffs and wage deductions are possible.
6. Income Tax or National Insurance (HMRC Debts)
HMRC has powerful collection tools, including seizing assets or garnishing wages. These debts should never be ignored.
7. Child Maintenance Payments
Non-payment can result in legal action, deductions from wages or benefits, and travel restrictions.
8. Business Debts (If Personally Liable)
If you’re a sole trader or personally guaranteed a loan, these can have a direct impact on your personal finances.
9. Joint Priority Debts
If you’ve taken out a priority loan with someone else, you’re both equally responsible. You could be liable for the full amount if the other party doesn’t pay.
Low Priority Debts
While these debts won’t typically result in loss of your home or immediate legal trouble, they can still cause long-term financial issues.
1. Credit Cards and Store Cards
Missed payments will impact your credit score and may lead to CCJs, but this typically takes time.
2. Personal Loans
Important to repay, but lenders usually pursue recovery through the courts over time.
3. Payday Loans
Often come with high interest rates, which can spiral quickly. Important to manage, but rarely lead to immediate legal action.
4. Catalogue Debts and Buy Now Pay Later Agreements
These can lead to defaults and affect your credit history, especially with the rise of BNPL services.
5. Overdrafts
Usually collected by your bank. Persistent use can harm your credit score, but it’s a lower priority compared to essential bills.
6. Contract Debts (Phones, Subscriptions)
Non-payment can lead to disconnection and collections activity, but they don’t threaten your home or freedom.
7. Debts to Friends or Family
Not legally enforceable unless formalised. Still emotionally significant and worth resolving, but less urgent from a legal standpoint.
8. Student Loans
These are income-based and are often written off after a number of years. They don’t affect your credit file and are not considered priority debts.
What to Do If You're Struggling
- List All Your Debts: Break them into priority and non-priority categories.
- Tackle Priority Debts First: This protects your home, health, and income.
- Talk to Creditors: Most lenders are open to negotiation, especially when you show willingness to pay.
- Seek Professional Advice: That’s what we’re here for.
At Advice Centre Group, we offer confidential, professional debt advice tailored to your circumstances. Whether you’re facing court action, struggling with overdue bills, or simply don’t know where to begin, we’re here to guide you.
We have helped over 11,300+ people improve their financial well-being, with over 1,500 reviews and a 4.9-star rating. If you’re ready to take control of your finances and start fresh, see how an IVA could help you today!
Hear From Karl
Best thing I done was contact them, they were so understanding and put you at ease, explained everything and answered every question I had straight away when messaging them. Feels like a weight has been lifted with one payment couldn’t recommend them enough. And the advisor I had was with me every step. Thank you really appreciate all you have done for me.
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