Why you need to deal with priority debts seriously

In my last posts I have been talking about different ways to fight against debt. Today I am going to write about priority debts.

What are priority debts?

These are debts on most essential utilities and facilities that you require for a decent living. Priority debts usually include rent or mortgage of your house, electricity, gas, telephone and water. Taxes and child maintenance payments can also be included in the priority debts. The name priority debts itself suggests that it must be dealt with highest priority. If you fail to make payments for these priority debts then the authority may prohibit you from using these essential utilities.

Non payment of your priority debts can

1. Take away your home
2. Put you in jail
3. Cut off your utility services
4. Confiscate your goods using bailiffs

However, if you are having any priority debts there is no need to panic. You will be notified before they take any action against you. You will also be offered options to make repayments and avoid any legal action. With a priority debt it is always advisable to consult a debt advisor and act accordingly.

Paying off your priority debts

Mortgage and rent comes first in the list of your priority debts. If the amount of arrears in your mortgage is too high then it becomes important for you to contact your lender and try to make an agreement to reduce your initial payments and to get extended repayment term.

The lenders generally negotiate on the basis of your credit history. It becomes easier for you to manage priority debts if you pay your debts every month even if the amount is small. Nevertheless there are certain payments that the court may consider as priority debt. County court Judgements and administration orders are also considered as priority debts. Thus both of them should be dealt with equal importance.

While rent and mortgage can take your home away, non payment of council taxes can put you behind bars and confiscate your properties as well. Hence priority debts should be treated with urgency in order to avoid severe consequences.

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