Debt guide
Which debts should I pay first?
When there is not enough money to pay everything, it helps to focus first on debts with the most serious consequences. The largest balance or highest interest rate is not always the most urgent bill.
5 minute read
What makes a debt a priority?
A priority debt is one where non-payment can lead to particularly serious action. This can include losing your home, having essential services disconnected, enforcement action or, in limited cases, imprisonment.
- Mortgage or secured-loan arrears
- Rent arrears
- Council tax arrears
- Gas and electricity arrears
- Court fines
- Child maintenance arrears
- Tax, VAT and National Insurance arrears
What about credit cards and loans?
Credit cards, overdrafts, catalogues, personal loans and similar borrowing are usually non-priority debts. They still need attention, but their immediate consequences are generally less serious than losing a home or essential service.
After allowing for essential living costs and priority commitments, affordable payments can be considered across unsecured creditors.
If you cannot cover every priority bill
Make a simple list of household income, essential spending and arrears. Contact the creditor as soon as you can, explain that you are experiencing financial difficulty and ask what support is available.
Avoid borrowing more to cover a payment without first understanding whether that will make the wider situation harder. Independent debt advice can help you decide what to pay and what options may be available.
This guide provides general information, not a personal recommendation. Your circumstances should be reviewed before you choose a debt solution.
