What are priority debts UK?

Priority debts are debts with the most serious consequences if unpaid: rent/mortgage (can lose home), council tax (can be imprisoned), energy bills (can be disconnected), child maintenance, court fines, and TV licence. These should always be paid before credit cards or loans.

Is council tax a priority debt?

Yes, council tax is a priority debt with serious consequences including bailiff action and, in extreme cases, imprisonment (up to 3 months). If you're struggling, contact your council immediately — they may offer payment plans, reductions, or direct you to support funds.

What happens if you don't pay non-priority debts?

Non-priority debts (credit cards, loans, overdrafts) can lead to default, CCJs, and damaged credit. However, you won't lose your home, be disconnected from utilities, or go to prison. This is why you pay priority debts first when money is tight.

Should I pay rent or credit card first?

Always pay rent first. Rent is a priority debt — non-payment can lead to eviction. Credit cards are non-priority — the consequences (damaged credit, CCJ) are serious but not as immediate or severe as losing your home.

Priority vs Non-Priority Debts UK — What to Pay First | PocketWise

When you can’t pay everything, knowing which debts come first protects you from the worst consequences. Here’s how to prioritise.

The Two Types of Debt

Priority Debts

What They Are	Consequences of Not Paying
Debts with serious consequences	Losing home, prison, disconnection
Must be paid first	When money is limited
Non-negotiable consequences	Even if you owe less

Non-Priority Debts

What They Are	Consequences of Not Paying
Debts with less severe consequences	Damaged credit, legal action
Pay after priorities	Once essentials covered
Still important	But not before rent/council tax

Priority Debts Explained

Your Home

Debt	Consequence
Rent arrears	Eviction
Mortgage arrears	Repossession
Secured loans	Repossession

Utilities

Debt	Consequence
Gas/electricity	Disconnection, prepayment meter
Water	Court action (cannot disconnect water)

Government/Council

Debt	Consequence
Council tax	Bailiffs, attachment of earnings, prison
Income tax	Bailiffs, court action
VAT	Bailiffs, court action
National Insurance	Court action

Legal Obligations

Debt	Consequence
Child maintenance	Attachment of earnings, prison
Court fines	Prison
Magistrates court fines	Bailiffs, prison
Compensation orders	Prison

Other Priorities

Debt	Consequence
TV licence	Prosecution, £1,000 fine
Hire purchase (car etc.)	Item repossessed

Non-Priority Debts Explained

Common Non-Priority Debts

Debt Type	Worst Consequence
Credit cards	CCJ, damaged credit
Personal loans	CCJ, damaged credit
Overdrafts	CCJ, damaged credit
Store cards	CCJ, damaged credit
Catalogue debts	CCJ, damaged credit
Payday loans	CCJ, damaged credit
Buy now pay later	CCJ, damaged credit
Money owed to family/friends	Relationship damage

What Can Happen (Non-Priority)

Stage	What Happens
1	Letters, phone calls
2	Default notice
3	Default registered (credit file)
4	Debt sold to collector
5	County Court Claim
6	CCJ issued
7	Enforcement (bailiffs, attachment of earnings)

What Can’t Happen (Non-Priority)

Cannot	Under non-priority debt
Lose your home	(Unless charging order on property)
Go to prison	It’s civil, not criminal
Have utilities cut off	Separate issue
Be physically forced	To pay

The Payment Priority Order

Step 1: Essential Living Costs

Pay First	Why
Food	You need to eat
Essential travel	Getting to work
Medication	Health essentials
Childcare	If needed for work

Step 2: Priority Debts

Pay Second	In This Order
1. Rent/mortgage	Keep your home
2. Council tax	Avoid bailiffs/prison
3. Energy bills	Stay connected
4. Child maintenance	Legal obligation
5. Court fines	Avoid prison
6. TV licence	Avoid prosecution

Step 3: Non-Priority Debts

Pay Third	Only After Above
Credit cards	If anything left
Loans	If anything left
Overdrafts	If anything left

Consequences Comparison

Severity Scale

Debt	Most Serious Consequence	Severity
Mortgage/rent	Lose home	⚠️⚠️⚠️⚠️⚠️
Council tax	Prison possible	⚠️⚠️⚠️⚠️⚠️
Child maintenance	Prison possible	⚠️⚠️⚠️⚠️⚠️
Court fines	Prison	⚠️⚠️⚠️⚠️⚠️
Energy bills	Disconnection	⚠️⚠️⚠️⚠️
HP/finance on car	Lose vehicle	⚠️⚠️⚠️
TV licence	£1,000 fine, criminal record	⚠️⚠️⚠️
Credit card	CCJ, credit damage	⚠️⚠️
Personal loan	CCJ, credit damage	⚠️⚠️
Overdraft	Account closure, CCJ	⚠️⚠️

Timeline of Consequences

Priority Debt	How Quickly Consequences Hit
Rent	Eviction process: 2-6 months
Mortgage	Repossession: 3-12 months
Council tax	Bailiffs: 2-3 months
Energy	Disconnection: 28 days notice

Non-Priority Debt	How Quickly Consequences Hit
Credit card	Default: 3-6 months
CCJ	6-12 months from default
Bailiffs	After CCJ, weeks-months

What to Do If You Can’t Pay

Priority Debts

Action	Details
Contact immediately	As soon as you know you can’t pay
Explain situation	Temporary or ongoing
Ask for payment plan	Reduced payments
Get free advice	Citizens Advice, StepChange

Non-Priority Debts

Action	Details
Don’t ignore	Debt won’t disappear
Write to creditors	Explain situation
Offer token payments	£1/month if needed
Consider formal solutions	DMP, IVA, DRO, bankruptcy

The Token Payment

For Non-Priority Debts	When Appropriate
If nothing left after priorities	Genuinely
Amount	£1/month shows willing
Letter	Explain full situation
Review	When circumstances change

Creating a Budget for Debt Priority

Budget Template

Income	Monthly
Wages/salary	£_____
Benefits	£_____
Other income	£_____
Total income	£_____

Essential Spending	Monthly
Food/groceries	£_____
Transport	£_____
Childcare	£_____
Essential phone	£_____
Total essentials	£_____

Priority Debts	Monthly
Rent/mortgage	£_____
Council tax	£_____
Energy	£_____
Child maintenance	£_____
Other priorities	£_____
Total priorities	£_____

Remaining After Priorities	Calculation
Income	£_____
Minus essentials	-£_____
Minus priorities	-£_____
Left for non-priority	£_____

Special Situations

When Non-Priority Becomes Priority

Situation	Becomes Priority
Bailiffs have visited	Already at enforcement
Charging order on home	Secured against property
Attachment of earnings	Court ordered
CCJ with liability order	Advanced enforcement

If Creditors Won’t Accept Low Payments

What They May Do	What You Can Do
Continue chasing	You can’t pay what you don’t have
Default your account	Shows financial difficulty
Take to court	Explain to judge in “means form”
Judge decides	Based on your actual means

When to Get Formal Help

Sign	Action
Can’t afford any priority payments	Debt charity immediately
Bailiff notices arriving	Urgent advice needed
Court papers received	Respond within deadline
Considering avoiding post	Don’t — seek help instead

Getting Free Help

Free Debt Advice Services

Organisation	Contact
StepChange	stepchange.org (0800 138 1111)
National Debtline	nationaldebtline.org (0808 808 4000)
Citizens Advice	citizensadvice.org.uk
PayPlan	payplan.com (0800 280 2816)

What They Can Do

Service	Details
Help prioritise	Sort debts into priority order
Negotiate	Contact creditors on your behalf
Set up DMP	Informal payment plan
Advise on solutions	IVA, DRO, bankruptcy if needed
Write letters	To creditors
Represent	At court hearings

Summary: Priority Order

Always Pay First

Priority	Debt
1	Rent/mortgage
2	Council tax
3	Energy bills
4	Child maintenance
5	Court fines
6	HP on essential items

Pay After Priorities

After	Non-Priority Debts
Only if left	Credit cards
Only if left	Loans
Only if left	Overdrafts
Only if left	Store cards

Key Message

Missing a credit card payment damages your credit score. Missing rent can make you homeless. There’s no comparison — always pay priority debts first.