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Day 2: What are your priority debts?

Having sorted through your bills and organised them into piles, the next step is to work out what to pay first. Once this is done, your debts should begin to feel more manageable. 

When you have so many things to pay every month, it can be difficult to tell the more important bills from the less important. Once you know what bills to focus on each month, you may find your overall situation easier to deal with.

Now you know what you owe, today we’re going to look at your household bills. These are known as priority debts. You should keep the payments on these as up to date as possible. Your living costs are also important, and need to be covered before looking at how to deal with your debt.

Today’s tasks…

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Task 1: Find out what your priority debts are, and why they’re more important than other debts


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Task 2: Understand why your unsecured debts are considered non priority


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Task 3: Find out how to deal with creditors who are contacting you

Task 1: Get together a list of your priority debts

Below is a list of typical priority debts you could be dealing with:

  • Mortgage or rent
  • Service charge or ground rent
  • Council tax
  • Electric
  • Gas
  • Water
  • Hire purchase goods
  • County Court judgments (CCJs)
  • Magistrate or court fines
  • Child maintenance

Are you dealing with any of these? Write a list of your priority debts, especially if you’re behind with any payments towards them.

Some bills are classed as priorities because the consequences of not paying them are greater than the consequences of not paying others. For example:

The consequences are different depending on whether you live in England, Wales, Scotland or Northern Ireland. Our Debt Info area has more information on how not paying priority debts may affect your situation.

I’m falling behind on my priority debts. What can I do?

If you’re struggling financially, it may be possible to put lower payments in place until things improve. This is usually a short-term solution, however. You could try:

  • Talking to your mortgage provider to see if they can offer you a lower payment on your mortgage. You may also be able to switch to an interest-only mortgage until things improve
  • See if you could switch to a cheapergas, electric or fuel provider by filling in an Ofgem-approved utility comparison tool
  • Speak to your local council to find out if your property is in the correct council tax band
  • Handing back the hire purchase item. You’ll have a balance to pay off but it’ll now be classed as a non-priority debt.

Please remember that companies aren’t obliged to reduce your payment amounts, and may encourage you to reduce payment on other debts in order to get back on track. They may also still pursue legal action against you. 

Task 2: Get together a list of your non-priority debts

So now we’ve looked at your priority debts, it’s time to look at how to deal with lower priority debts. These are your unsecured, personal debts. When a debt is unsecured, it means that you didn't 'secure' it against an asset when you took it out, such as your house or car.

Your unsecured debts include:

  • Personal loans
  • Credit cards
  • Overdrafts
  • Store cards
  • Catalogue debts
  • Payday loans
  • Cancelled contracts e.g. old mobile phone debts

These debts are classed as ‘non-priority’ because the consequences of not paying these are less severe than not paying your priorities.

Once you know how much money you have left over from your priority debts, you can then think about how to deal with your non-priority debts.

Task 3: Deal with creditors contacting you about debt

If you’ve fallen behind on payments to your creditors, you might find they contact you more regularly by phone, email, SMS or letter. This is a normal part of the debt collection process.

Let’s take a look at the various ways a creditor may contact you:

Here are some of the types of letter you may get: 

  • Annual statements, which creditors are obliged to send at least once a year 
  • Reminder letters asking you to make a payment or set up a payment plan 
  • Default notices, letting you know that the original credit agreement has been broken and a note has been added to your credit file.
  • Letters from collection agencies, who buy debts from creditors and then pursue payment on their behalf. The language collection agencies use can sometimes seem more threatening than the letters from your original creditor. 

You may also receive N1 County Court claim forms, which means that your creditors are seeking a County Court judgment (CCJ) against you. These are light blue in colour and have a court crest in the top left corner. 

These have a deadline to respond. If you receive any letters from the County Court, please call us as soon as possible. 

Always open and read letters from creditors as soon as you get them. Some of them don’t need you to take any action, but others are important as they could be about what next steps your creditor may take to recover the debt. 

You can’t stop your creditors writing to you. However, if you think any letters you get are misleading, you can make a complaint to the creditor.

Your creditors shouldn’t call you at ‘unreasonable’ times, but the law doesn’t set any times when creditors can call. You can make a complaint if they keep calling at times you’ve told them to avoid.

If a creditor calls about missed payments which you can’t make, explain that you can’t afford to pay what they want. If you’ve contacted us for help with your debts, or if you’re planning to do this soon, let them know.

You have the right to end the call if you feel distressed. Politely ask the creditor to send a letter or email instead then hang up the phone. You won’t get into trouble for this.

If you don’t want to receive any phone calls you can ask your creditors to remove your number from their records. We have an example 'stop a creditor from calling' letter (PDF) you can use to ask for this.

Just because a creditor’s contacting you more frequently doesn’t mean they're more important than the others. You should first focus on making sure your priority debts are paid, and then work out what you can pay towards any non-priority debts.

That’s all for today. Now go make yourself a well-deserved cup of tea!

 Coming up in day 3...

We'll help you go through your bills and statements so you can start putting together a budget.

Skip ahead to day 3 now

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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