Priority debts may be a bit of a taboo for many people and understanding what qualifies as a priority debt and how they should be treated can often be confusing. Whilst all debts are important, some are more important than others.
This article hopes to outline what a priority debt is, what qualifies as a priority debt and how they should be treated.
Priority debts are debts that must be paid before all other loans & credit card debts. Not putting priority debts first could lead to court action, bailiffs or even imprisonment, depending on the debt.
When you owe money to creditors, each creditor will want their money before you pay anyone else, this is normal as each will want to be paid first. If you’re struggling financially you should pay priority debts before any others.
The following are what would generally qualify as priority debts:
Priority debts should be considered just as important as general living costs as not paying them could impact on your standard of living greatly – especially if it is a debt that could lead to imprisonment (such as Council Tax) or the loss of your home (such as your mortgage).
Other creditors not considered a priority debt should be paid after priority debts.