Everyone you owe a debt to will want you to pay off their debt
first. Whatever your creditors (the one's you owe the money to) want
you to do, and whatever you would like to do, you must prioritise
your debts. You must do this for three reasons.
1. To maintain the basics of life: electricity, gas, water, a ‘roof
over your head’ etc.
2. To avoid legal
action, in particular, criminal legal action: an unpaid TV licence
and/or court fine can (and will) lead to imprisonment.
3. To avoid removal of
your chattels (removable possessions) by County Court bailiff or
High Court sheriff.
Your priority debts
are:
on Debt Management and
Bankruptcy
Our advisors will be happy to
give you free debt advice about how you can manage your
debts
- Gas, Electric and Water Rates
- Rent Arrears
- Maintenance (ex-partner and children)
- Court Fines
- Vat, Income Tax, National Insurance
- Television Licence
Hire Purchase (goods on hire purchase cannot be
repossessed without a court order if you have paid over
a third of the total amount payable under the HP
Agreement. If you have paid at least fifty percent, and
there are no arrears (or you pay the arrears) you can
hand back the goods without further payment. The goods
must be in a 'reasonable' condition.
All other debts will have an equal rating. It is not
uncommon for debtors (the one who owes the debt) to
maintain full payment of a non-preferential debt in an
attempt to keep open a line of credit, or pay a
threatening creditor 'or else'.
If you do pay a
non-preferential creditor in such a way you will not
receive the support of your other creditors (which is
crucial), and bankruptcy could follow.
