Priority Debts

"A budget is just an orderly way of discovering that you can't afford to live on what you're earning."

Some debts are more important than others. The law allows different creditors different ways of getting their money back. If you bury your head some creditors could do any of the following:

• Send in bailiffs to take possessions from your home or business.
• Repossess your home.
• Cut off your gas, electricity or water.
• Ask the magistrates court to send you to prison.

These are the types of debts you could have problems with:

Although gas, electricity and water companies have the power to disconnect the service, they normally place you on a repayment programme by way of card meters.

All the above are priority creditors and under no circumstances should you ignore them. It is important you use your available money to pay these creditors first. Do not pay your secondary creditors until you have reached an agreement with all of the above where applicable.

Secondary creditors include:

• Unsecured loans
• Credit Cards
• Unnecessary hire purchase agreements
• Store cards
• Catalogue and mail order
• Mobile phone (disconnected)
• Repossessed house or car loans

We do not wish to make secondary creditors seem less important, but their power to recover the debt are minimal compared with priority debts.