Priority and non-priority debts: the order that protects you
Not all debts are equal, and treating them as if they were is how people lose homes over credit cards. The distinction is about consequences, not amounts.
Why the distinction exists
The loudest creditor is rarely the most dangerous one. A card company writes aggressive letters but holds no power beyond the courts; a council can put an enforcement agent at the door within months; a landlord in England can now seek possession on three months’ arrears. Paying by volume of letters rather than by consequence is the single most common budgeting mistake in debt. Where enforcement is the fear, the bailiff guide sets out exactly what agents can and cannot do. Hire purchase on an essential car sits among the priorities — what happens if you can’t pay covers the protections that decide whether you keep it. Overdrafts are non-priority, and paying one off should never come at the expense of the priorities above.
The priority list
Rent and mortgage. Council tax. Gas and electricity. Magistrates’ court fines. Child maintenance. Income tax and VAT. TV licence. Hire purchase on a car you need for work. Secured loans. These come out of the budget first, at whatever level keeps the consequence away — then whatever remains is shared among non-priority creditors, pro rata.
Non-priority debts, and why that is good news
Credit cards, personal loans, overdrafts, catalogues, BNPL, water arrears (water companies cannot disconnect homes). These creditors must go to court to enforce anything, which takes time and is visible coming. That is precisely what makes informal offers and the formal solutions work: every route from a DMP to an IVA is built around non-priority debt, with priority payments protected inside the budget.
When you cannot cover the priorities
That is the definition of a debt-advice situation, not a budgeting one. Free advice exists for exactly this, and the formal routes are compared on the solutions hub.