Priority Debts

Priority debts are defined as debts that need to be prioritised as if they aren’t dealt with, they can cause serious problems. We advise working out what your priority debts are and ensuring you have all information regarding them to hand.

The following debts can be classed as 'priority debts':

Rent Arrears


Ensuring that you deal with any debts around rent is essential, as you risk eviction by your landlord if rent isn’t paid. Before this can happen, your landlord will have to obtain a ‘possession order’ from the court, which will detail when you have to leave. If you don’t leave by the date detailed on the possession order, your landlord can take further action, requesting that the court sets a date for your eviction.




Mortgage and Secured Loan Arrears


Similarly to rent arrears, not keeping up with your mortgage payments means that you risk your bank or building society evicting you and repossessing your home.

Before this can happen, the bank/building society will have to obtain a ‘possession order’ from the court, which will detail when you have to leave. If you don’t leave by the date detailed on the possession order, your bank/building society can take further action, requesting that the court sets a date for your eviction.




Council Tax Arrears


Council tax is an important debt to take care of, as if you don’t pay, your local council could take you to the Magistrate’s court.

Following this, if you are able to, but choose not to pay when the Magistrate’s court tells you to, you could go to prison. However, if you can show that you’re unable to pay, you won’t go to prison.




Gas/Electricity Bills


Any gas or electricity debts that are with a current supplier are important to take care of, as no payment could lead to your gas and/or electricity being cut off if you don’t pay.

Before they do cut off your gas or electricity, your suppliers has to give you a chance to pay any unpaid bills through a payment plan. This must be communicated with 7 days’ notice in writing before cutting off your supply.

COVID-19: If you’re unable to pay your gas/electricity bills.

Due to current circumstances, your energy supplier won’t cut off your energy supply if you miss a payment.


However, if you have a prepayment meter and it isn’t topped up, your energy supply could still stop.

If you are unable to pay and experience problems with your energy supply, visit your suppliers’ website to find out what you can do.




Phone/Internet Bills


For some, phone and internet bill debts may be a priority if they are essential to their day-to-day living for reasons such as doing your job, looking for work, or being able to contact someone as a matter of urgency.

If these bills aren’t paid, your supplier can cut off your phone or internet. However, if it is essential that you have access to them, contact your supplier.




TV Licence Payments


Watching TV without a licence could lead to a fine from the Magistrate’s court. You can find out here if you need a TV licence.

If you are fined, and have the money but choose not to pay, you could go to prison. If you can prove that you aren’t able to pay, you won’t have to go to prison.




Court Fines


If you have the money, but choose not to pay court fines, you could go to prison. However, you won’t go to prison if you can show that you’re unable to pay.

Reasons that you might receive a court fine include:

  • Speeding or breaking other driving laws
  • Watching TV without a TV licence




Overpaid Tax Credits


HMRC will inform you if you have been overpaid tax credits.

It’s essential that this is dealt with as soon as possible, as if it isn’t, HMRC can:

  • Take the owed money out of your wages
  • Take the owed money out of your benefits or tax credits
  • Order bailiffs to take your property

You will be warned by HMRC if they are going to do this, but they aren’t required to go to court before this.

If you are able to, but choose not to pay a tax credits overpayment, HMRC are able to take you to court. If you don’t turn up for your court hearing when asked or do what the court suggests, you could also be sent to prison.




Payments for Goods Bought on Hire Purchase or Conditional Sale


After buying something on hire purchase or conditional sale, it’s paid for in instalments and it’s not officially yours until you finish paying. If you’re unsure on whether you bought something on hire purchase or conditional sale, check the contract from the sale.

It’s important to take care of these debts, as the creditor may be able to take back your purchased goods when payments have been missed. If the goods are kept in your home, or you’ve paid back over a third of what you owe towards the goods, the creditor will have to go to court in order to take back these goods.

Goods bought on hire purchase and conditional sale are only a priority if the goods are very important. Important goods might include:

  • Anything you need to travel, such as a car if you don’t have access to public transport
  • Anything required to cook or prepare food
  • Appliances needed to store certain medicines e.g. a fridge or freezer




Unpaid Income Tax, National Insurance and VAT


These debts are important to take care of as if you don’t, HMRC are allowed to:

  • Take the owed money out of your wages
  • Take the owed money out of your benefits or tax credits

You will be warned by HMRC if they are going to do this, but they aren’t required to go to court before this.

If you are able to, but choose not to pay a tax credits overpayment, HMRC are able to take you to court. If you don’t turn up for your court hearing when asked or do what the court suggests, you could also be sent to prison.

Find out more about how to deal with these priority debts here.

COVID-19: If you’re unable to pay your tax bill

Due to current circumstances, if you’re unable to pay your tax bill at the moment, you should speak to HMRC as they may be able to delay your payment. Please find information around their coronavirus helpline below:

HMRC COVID-19 Helpline

Telephone: 0800 0159 559

Monday to Friday, 8am to 4pm

Calls to this number are free.

Find out more about what to do if you can’t pay your tax bill here.




Unpaid Child Maintenance


Any unpaid child maintenance should be dealt with as a priority as if they aren’t, the Child Maintenance Service are able to take the money owed from your wages or bank accounts if you fail to pay.

You will be warned by the Child Maintenance Service if they are going to do this, but they aren’t required to go to court before this.

If you are able to, but decide not to pay, the Magistrate’s court are able to:

  • Take away your driving licence or passport for up to 2 years
  • Send you to prison

However, if you show you are unable to pay, neither of these things will happen.





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