What are priority debts, and why do they come first?

The one rule

A debt is a priority debt if not paying it could lead to losing your home, having your energy cut off or switched to a prepayment meter, court action with serious penalties, or in rare cases prison. Everything else is a non-priority debt. Non-priority debts still matter, they just come second.

This is the bit people get backwards. A credit card company that emails you every day feels urgent. A council tax reminder letter that arrives once feels like it can wait. In reality the council tax is far more serious.

Which debts are priority?

The usual priority debts are:

• Rent or mortgage arrears. Your home is at stake.
• Council tax (rates in Northern Ireland). Councils can move quickly to court and enforcement.
• Gas and electricity. You could be moved onto a prepayment meter, or in extreme cases disconnected.
• TV Licence. Watching live TV without one is a criminal offence, so it can mean prosecution and a fine.
• Court fines and magistrates' court orders.
• Child maintenance.
• Income tax, National Insurance or VAT owed to HMRC.
• Hire purchase on something you really need, like the car you drive to work, because it can be taken back.

Which debts are non-priority?

These still need dealing with, but they can't take your home or your liberty straight away:

• credit cards and store cards;
• overdrafts;
• buy now pay later plans;
• catalogue accounts;
• personal loans and payday loans;
• money borrowed from friends or family.

Ignore them and you'll get charges, letters and possibly a county court judgment, which will hurt your credit file. So "non-priority" means "second in the queue", not "optional". Sort a real pile yourself in Priority vs non-priority.

What to do if you can't pay everything

1. Do a budget first. Work out what comes in and what essentials cost: food, travel to work, housing, energy. What's left is the money you actually have for debts.

2. Pay the priority debts. Contact those creditors straight away if you can't pay in full. Councils, landlords and energy suppliers would rather agree a plan than go to court. Ask for a payment arrangement you can genuinely keep.

3. Share what's left between non-priority creditors. A fair way to do it is pro rata: the bigger debts get a bigger slice. Make each one a realistic offer, in writing. Our lesson Making a budget offer walks you through it with Mo's actual numbers.

4. Don't borrow to pay a priority debt unless you've had free advice first. Swapping council tax arrears for a high-cost loan just moves the problem somewhere more expensive.

Free help that can pause things

A free debt adviser can look at everything with you, talk to creditors for you, and check you're getting all the benefits and discounts you're entitled to. In England and Wales they can also apply for Breathing Space, which gives you 60 days where most interest, charges and enforcement on included debts are paused. You can only get it through a debt adviser.

Free, confidential debt advice: StepChange 0800 138 1111; National Debtline 0808 808 4000 (England and Wales). You can also call Citizens Advice (Adviceline 0800 144 8848). They will never charge you, and any company that wants a fee to "write off" your debts is worth a hard look. Ronnie loves fake debt help, which is why we made Ronnie's 'debt help'.

If letters are getting scary

Court papers and enforcement letters have deadlines, so open them, even if you'd rather put them in a drawer and move to the countryside. Genuine enforcement agents (bailiffs) have rules they must follow, and an adviser can tell you what they can and can't do. Practise reading the paperwork in Letters, courts and bailiffs, and find the rest of the free lessons in the debt help library. Every debt help lesson and game is free, forever, no code needed.