This guide explains which debts to pay first, why it matters, and what happens if you don’t.

What Are Priority Debts?

Priority debts are bills where non-payment leads to serious consequences:

• Losing your home
• Losing your liberty (prison, in rare cases)
• Losing essential services (heating, water)
• Bailiffs at your door
• Court action

These MUST be paid first, even if other creditors are chasing you harder.

What Are Non-Priority Debts?

Non-priority debts are bills where non-payment won’t lead to losing your home or essential services.

The worst that happens:

• Damage to credit score
• CCJ (County Court Judgement)
• Pressure from debt collectors
• Eventually court action (but less severe consequences)

Pay these AFTER you’ve paid priority debts.

Priority Debts: The Complete List

1. Rent or Mortgage Arrears

Why it’s priority: You could lose your home.

What happens if you don’t pay:

• Landlord can evict you (after following legal process)
• Mortgage lender can repossess your home
• You become homeless

Timeframe:

• Renters: Usually 2 months arrears before eviction process starts
• Homeowners: Usually 3+ months before repossession proceedings

What to do:

• Contact landlord/lender IMMEDIATELY
• Explain your situation
• Ask for reduced payments or payment holiday
• Get help from Shelter or Citizens Advice

2. Council Tax Arrears

Why it’s priority: They can send bailiffs or take money directly from your wages.

What happens if you don’t pay:

• Court summons (costs added)
• Bailiffs sent (£310+ in fees added)
• Attachment of earnings (money taken from wages)
• Deductions from benefits
• In rare cases: prison (for deliberately refusing to pay)

Timeframe:

• Usually 2-3 months before court action
• Bailiffs can come within weeks of court order

What to do:

• Contact council immediately
• Ask to restart payment plan
• Apply for Council Tax Reduction (benefit)
• Offer what you can afford

3. Gas and Electricity Bills

Why it’s priority: They can cut off your supply (though rare) or force-fit a prepayment meter.

What happens if you don’t pay:

• Warning letters
• Warrant to enter your home and fit prepay meter
• Debt passed to debt collectors
• Court action

Note: They rarely disconnect supply nowadays (especially vulnerable people), but they can make life difficult.

What to do:

• Contact supplier immediately
• Ask for payment plan
• Ask about Warm Home Discount (£150 off)
• Check if eligible for social tariff
• Apply for Fuel Direct (payments from benefits)

4. Water Bills

Why it’s priority (sort of): They cannot disconnect supply, but debt mounts and court action is possible.

What happens if you don’t pay:

• Debt grows with charges
• Debt collectors chase you
• CCJ possible
• But they CANNOT cut off your water supply

What to do:

• Contact water company
• Ask about WaterSure scheme (caps bills for people on benefits)
• Ask about social tariff
• Set up payment plan

5. Child Maintenance Arrears

Why it’s priority: Court can take serious action.

What happens if you don’t pay:

• Money taken from wages
• Money taken from benefits
• Bailiffs
• Driving licence removed
• Passport removed
• Prison (in extreme cases)

What to do:

• Contact Child Maintenance Service (CMS)
• Explain change in circumstances
• Apply to reduce payments if income has dropped
• CMS: 0800 171 2345

6. Court Fines

Why it’s priority: You can be sent to prison.

What happens if you don’t pay:

• Bailiffs
• Money taken from wages
• Driving licence removed
• Prison (yes, really)

What to do:

• Contact the court immediately
• Ask for time to pay or payment plan
• Never ignore court fines

7. Income Tax, VAT, or National Insurance (If Self-Employed)

Why it’s priority: HMRC has strong powers.

What happens if you don’t pay:

• Bailiffs
• Bankruptcy proceedings
• County Court Judgement
• Money taken from bank accounts
• Business closed down

What to do:

• Contact HMRC Time to Pay: 0300 200 3822
• Arrange payment plan
• Be honest about your situation
• Get accountant or debt advice

8. TV Licence Arrears

Why it’s priority: Criminal prosecution possible.

What happens if you don’t pay:

• Court summons
• Criminal conviction
• Fine up to £1,000
• Criminal record

What to do:

• Pay for licence if you watch live TV or use iPlayer
• If you don’t watch live TV, cancel and get refund
• Set up payment plan if struggling

Controversial: Some people argue TV Licence isn’t a “real” priority. But it can lead to criminal prosecution, so I’m including it.

Non-Priority Debts: The Complete List

1. Credit Cards

What happens if you don’t pay:

• Default on credit file (6 years)
• Debt collectors chase you
• Eventually CCJ possible
• Damage to credit score

But: Won’t lose your home or go to prison.

2. Personal Loans

Same as credit cards:

• Credit damage
• Debt collectors
• Possible CCJ
• But no immediate serious consequences

3. Store Cards / Catalogues

Same as credit cards:

• Credit damage
• Chasing letters/calls
• Possible CCJ

4. Overdrafts

What happens:

• Bank might close account
• Credit score damage
• Debt collectors
• Possible CCJ

But: Not priority.

5. Payday Loans

What happens:

• Aggressive chasing
• High interest mounts
• Credit damage
• Possible CCJ

Note: Some payday lenders have broken rules. Check with Citizens Advice if you’re being chased unfairly.

6. Money Owed to Friends/Family

What happens:

• Damaged relationships
• They might take you to small claims court

But: No bailiffs, no losing your home (unless secured against it).

7. Buy Now Pay Later (Klarna, Clearpay, etc.)

What happens:

• Late fees
• Credit damage
• Possible CCJ

8. Parking Fines (Private)

What happens:

• Chasing letters
• Possible small claims court

But: Much less serious than priority debts.

Note: Council parking fines ARE priority (can lead to bailiffs).

How to Prioritise When You Can’t Pay Everything

If you can’t afford all your bills, here’s the order:

Step 1: Work Out Your Budget

Essential costs (MUST pay):

• Rent/mortgage
• Council tax
• Utilities (gas, electric, water)
• Food
• Essential transport (to work)
• Essential childcare

Total essential costs: £____

Step 2: Pay Priority Debts Next

After essentials, pay:

• Rent/mortgage arrears
• Council tax arrears
• Energy arrears
• Court fines
• Child maintenance

Whatever is left after essentials goes to priority debts first.

Step 3: Split Remaining Money Between Non-Priority Debts

If there’s anything left, split it proportionally between non-priority debts.

Example:

• Money left after essentials and priorities: £100/month
• Three non-priority debts: £3,000, £2,000, £1,000

Pro-rata split:

• £3,000 debt (50% of total) = £50/month
• £2,000 debt (33% of total) = £33/month
• £1,000 debt (17% of total) = £17/month

[Link to your negotiating with creditors post for details]

Step 4: Get Free Help

If you’re struggling to prioritise:

• StepChange (0800 138 1111)
• National Debtline (0808 808 4000)
• Citizens Advice

They’ll help you work out the right order and negotiate with creditors.

Real Example: How to Prioritise

Sarah’s situation:

• Income: £1,400/month
• Rent: £700
• Council tax: £120 (£200 behind)
• Gas/electric: £100 (£150 behind)
• Food: £200
• Phone: £20
• Transport: £60
• Total essentials: £1,200

Money left: £200/month

Her debts:

• Council tax arrears: £200 (PRIORITY)
• Energy arrears: £150 (PRIORITY)
• Credit card: £2,500 (non-priority)
• Overdraft: £800 (non-priority)
• Catalogue: £400 (non-priority)

How Sarah should allocate the £200:

1. Council tax arrears: £50/month
   • Clears arrears in 4 months
   • Stops bailiffs
2. Energy arrears: £50/month
   • Clears arrears in 3 months
   • Maintains supply
3. Credit card: £60/month (pro-rata: 2,500/3,700 = 68%)
4. Overdraft: £25/month (pro-rata: 800/3,700 = 22%)
5. Catalogue: £15/month (pro-rata: 400/3,700 = 10%)

Total: £200/month

Priority debts get paid first. Non-priorities get what’s left.

What Happens If You Pay Non-Priority First?

Like I did:

If you pay credit cards instead of rent:

• You keep credit card companies happy
• But you lose your home

Sounds extreme, but it’s true.

Credit card companies shout loudest. They call daily. They send threatening letters.

But landlords and councils take serious action quietly.

Don’t fall into this trap.

Exceptions: When Non-Priority Becomes Priority

If Secured Against Your Home

If you secured a loan against your home (secured loan, logbook loan), it becomes priority.

Why: They can repossess your home.

If You’ve Had a CCJ

Once there’s a County Court Judgement:

• Bailiffs can be sent
• It becomes more urgent

[Link to your CCJ post]

If Bailiffs Are Already Involved

Once bailiffs have a warrant:

• Situation is urgent
• Get help immediately

How to Deal with Non-Priority Creditors Chasing You

Non-priority creditors might chase you hardest:

• Daily phone calls
• Threatening letters
• Debt collectors at your door

Don’t let them pressure you into prioritising them over priority debts.

What to say: “I understand I owe this money. However, I’m currently prioritising debts that could lead to losing my home/essential services. I can offer £X per month based on my current budget. If you don’t accept this, I’ll need to seek debt advice.”

[Link to your negotiating with creditors and debt collectors posts]

Getting Help with Priority Debts

Rent Arrears

Shelter

• Phone: 0808 800 4444
• www.shelter.org.uk
• Free housing advice

Citizens Advice

• www.citizensadvice.org.uk
• Local offices
• Can negotiate with landlords

Council Tax

Contact your local council

• Ask for payment plan
• Apply for Council Tax Reduction
• www.gov.uk/apply-council-tax-reduction

Energy Bills

Contact your supplier

• Most have hardship funds
• Ask about social tariffs
• Apply for Warm Home Discount

Citizens Advice

• Can negotiate on your behalf

General Debt Help

StepChange

• 0800 138 1111
• www.stepchange.org
• Free debt advice
• Can negotiate with all creditors

National Debtline

• 0808 808 4000
• www.nationaldebtline.org
• Free advice and fact sheets

Final Thoughts

When you’re struggling with debt, prioritising correctly can save you from:

• Losing your home
• Bailiffs
• Court action
• Serious consequences

Remember the golden rule: Priority debts FIRST. Non-priority debts SECOND.

Even if credit card companies are calling 10 times a day, pay your rent first.

Even if you feel guilty about not paying Aunt Mary back, pay council tax first.

Priority = serious consequences. That’s what matters.

If you’re not sure how to prioritise: Contact StepChange, National Debtline, or Citizens Advice TODAY.

They’ll look at your situation and tell you exactly what to pay first.

Don’t make my mistake. Prioritise correctly from the start.

Get Free Help:

• StepChange: 0800 138 1111 / www.stepchange.org
• National Debtline: 0808 808 4000 / www.nationaldebtline.org
• Citizens Advice: www.citizensadvice.org.uk
• Shelter (housing): 0808 800 4444 / www.shelter.org.uk

Last updated: November 2025