Prioritise!

Some debts have more severe consequences for non-payment than others. Work out what you have to deal with immediately and make a plan of action.

Priority debts action plan

Debt advice centre

Working out your priority debts

Here is a list of the debts you need to make your number one priority. As you can see, the penalties for non-payment can be severe.

Type of debt	Final sanction for non-payment
Mortgage / secured loan	Loss of house
Rent	Eviction
Gas / electricity	Disconnection / fitting of prepayment meter
Water	Since the Water Act, 1999, the supply cannot be disconnected, but we recommend that this is regarded as an essential expenditure and treated as a priority payment as it could result in a County Court Judgment
Council tax	Taken from wages / benefits; imprisonment
Magistrates fines	Bailiffs, imprisonment
Inland Revenue and VAT	Bailiffs; bankruptcy, imprisonment

Source: Credit Action

Don’t panic. Although non-payment can lead to these penalties, you can avoid facing them even if you don’t have enough money to pay your debts straight away. The important thing is to work out a payment plan and show your creditors that you will pay.

Your debt action plan

Now that you have all the information, it’s time to take action. In summary, here’s what you should do:

Complete your financial statement
List your priority debts
Work out how much you can pay each creditor
Write a letter outlining the reasons for your financial difficulties and your payment offer. Use our letter template
Send your letter, financial statement and list of priority debts to each creditor
Decide how you are going to deal with your debt in the long term, by either getting a consolidation loan or taking one of the many formal procedures to deal with it.

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