Paying your priority bills first is common debt advice. But identifying them can be easier said than done.
Should you pay the ones you know you can clear in one go? Should you focus on the ones from the companies that send the most reminders? Or should you be taking a completely different approach?
We’re talking about all the different bills you might have, which ones are considered priority debts and why, and what to do if you’re struggling.
What are priority bills?
Priority bills and debts are ones which could affect your home or health, lead to legal problems, or result in further debt from fines if they aren’t paid.
Across the UK, priority bills include, in no particular order:
- Secured loans
- Council Tax (called “rates” in Northern Ireland)
- Gas and electricity bills
- Phone bills
- TV licence
- County Court Judgments (CCJs), called Decrees in Scotland
- Car finance, hire purchase agreements and logbook loans
- Fines issued by a magistrate’s court (including criminal fines)
- Tax, VAT and National Insurance
- Child maintenance
This means that non-priority bills include (again in no particular order):
- Water (with some exceptions)
- Credit cards
- Personal loans
- Payday loans
- Store cards
- Penalty Charge Notices (PCNs) such as parking tickets
- Overpayment of benefits (with the exception of tax credits)
- Money owed to family or friends
However, even though these bills are classed as non-priority bills, you still need to pay them. If you fail to pay a non-priority bill, then action by your creditor could turn it into a priority bill.
What happens if I don’t pay my bills?
What happens if you can’t keep up with your payments depends on who you owe money to. Common consequences of failing to pay a bill include:
- Debt collection agencies being appointed to recover a debt
- Bailiffs visiting your home and taking your possessions to repay a debt
- CCJs being taken out against you
- Information being recorded in your credit history, which can affect your credit score for up to six years
Priority bills also come with further, more serious consequences of non-payment. Depending on the bill, you could face:
- Repossession of your home (if you’re a homeowner)
- Eviction from your home (if the bill is rent)
- Repossession of another item that credit is secured against (for example, your car)
- Being disconnected from essential services such as gas, electricity or a phone line
- Money being deducted from your wages or benefits (called an attachment of earnings)
- A charging order being placed against your property
It is illegal to fail to pay some priority bills. These are Council Tax, other taxes and National Insurance, TV licences and child maintenance. You could be prosecuted if you don’t pay these bills. This could lead to some of the consequences listed above, fines, or in rare situations, being sent to prison.
Where to get help if you’re struggling
If you’re struggling to pay any bill, regardless of its priority, speak to the person or company you owe. Most organisations can offer a range of solutions that could help nip the situation in the bud while you get back on track. These may include:
- Freezing interest and charges
- Offering you an alternative product or tariff that better suits your circumstances
- Providing you with a grace period to seek debt advice
- Setting up a repayment plan that you agree is affordable for you
- Offering you the chance to settle your debt without repaying it in full
If you’re not sure where to begin with tackling what you owe, then independent debt advice could help. You can access this for free from these organisations:
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