Understanding priority and non-priority debts
Priority and non-priority debts
Not all debts are equal in terms of the consequences of not paying them. Understanding the difference can help you decide which to address first.
Priority debts
These are debts where the consequences of not paying can be particularly serious:
| Debt | Possible Consequence |
|------|---------------------|
| **Rent / mortgage** | Eviction or repossession |
| **Council tax** | Bailiff action, benefit deductions |
| **Energy bills** | Disconnection (pre-pay meter) |
| **Child maintenance** | Court enforcement |
| **TV licence** | Fine up to £1,000 |
| **Income tax / VAT** | HMRC enforcement |
| **Magistrates' court fines** | Further penalties |
Non-priority debts
These debts are still important, but the immediate consequences are generally less severe:
| Debt | Typical Consequence |
|------|-------------------|
| **Credit cards** | Default, credit file impact |
| **Personal loans** | Default, CCJ possible |
| **Overdrafts** | Default, credit file impact |
| **Store cards / catalogues** | Default, credit file impact |
| **Money owed to family/friends** | No legal consequence (unless formal) |
| **Water bills** | Cannot be disconnected |
What this means
This does not mean non-priority debts are unimportant. A default or CCJ can affect your ability to access credit in the future. However, the immediate consequences of not paying priority debts tend to be more serious.
What you could consider
Tools that may help
Frequently asked questions
Can I ignore non-priority debts?
It is generally not advisable to ignore any debt. While the immediate consequences may be less severe, creditors can still take action such as obtaining a County Court Judgement (CCJ). It may be worth contacting them to explain your situation.
What if I can only afford to pay some debts?
If your income only covers essential expenses and priority debts, free advice services like StepChange can help you work out a plan. Creditors are required to treat you fairly if you are in genuine financial difficulty.
Are water bills a priority debt?
Water bills are unique — your water supply cannot be disconnected. However, water companies can still take court action to recover arrears. Many have hardship funds and payment plans available.