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Last updated:
28/03/2023

Priority and non-priority debts

  1. Priority and non-priority debts
  2. Bank accounts and debt
  3. Drawing up a budget sheet
  4. Negotiating reduced payments to your debts
  5. Free Debt Management Plans
  6. Administration Order
  7. Debt Relief Order
  8. Individual Voluntary Arrangement
  9. Bankruptcy
  10. Write Offs
  11. Will I be 'blacklisted'?
  12. What can creditors do if I don't pay?
  13. Should I tell creditors about my mental health?
  14. Getting help from a specialist adviser
  15. What can I do if I have borrowed money from a loan shark?
  16. Next steps

Deciding on priority debts

What is a debt?

A debt is money that you owe to an organisation or another person. The organisation or person that you owe the money to is called the ‘creditor’.

Normal bills, for example rent, mortgage or electricity are not debts. They are essential expenses. If you fall behind with any essential expenses, the money you owe is a debt.

Try separating out your debts into two categories. This can make sure the most important ones are paid first. The two categories are priority and non-priority debts.

Priority debts

A priority debt is a debt that means you would lose something if you did not pay it. Because you might lose something, they are more important than other debts. If you have both priority and non-priority debts, it is vital that you deal with the priority debts first.

If you have both priority and non priority debts, it is vital that you deal with the priority debts first.

Example of priority debt

What might happen if I don’t pay it?

Mortgage or secured loan arrears

Repossession of property

Rent arrears

Eviction from property

Rates arrears

Repossession of Property (if you refuse or neglect to pay)

Gas / electricity arrears

Disconnection

Magistrates court fines

Imprisonment

Child maintenance arrears

Imprisonment, loss of property or other assets, loss of driving license for up to 2 years.

Hire purchase arrears

Repossession of hire purchase goods

 

Non-priority debts

A non-priority debt is any debt that is not a priority. This might include credit cards, unsecured loans and overdrafts. It also includes debts such as money owed to family and friends.

All non-priority creditors should be treated fairly. You should not make full payments to one creditor while reducing payments to another. If you cannot afford the minimum payment to any of your non-priority debts, you should make reduced payments to all of them using a pro rata calculation. You can find more information about this in the self-negotiation section.

A debt adviser will help separate your priority and non-priority debts before explaining what options are available to you for dealing with them. You can find a debt adviser in our useful contacts section.

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Within this subject

  1. Priority and non-priority debts
  2. Bank accounts and debt
  3. Drawing up a budget sheet
  4. Negotiating reduced payments to your debts
  5. Free Debt Management Plans
  6. Administration Order
  7. Debt Relief Order
  8. Individual Voluntary Arrangement
  9. Bankruptcy
  10. Write Offs
  11. Will I be 'blacklisted'?
  12. What can creditors do if I don't pay?
  13. Should I tell creditors about my mental health?
  14. Getting help from a specialist adviser
  15. What can I do if I have borrowed money from a loan shark?
  16. Next steps
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