The first step in dealing with debt is to separate priority debts, where the consequences of not paying are most serious, from non-priority debts.
Priority debts
These should be dealt with first, because not paying can lead to losing your home, having your energy supply affected, enforcement action or, in rare cases, prison.
| Debt | Why it's a priority | Can it go in an IVA? |
|---|---|---|
| Mortgage arrears | Risk of repossession | No, secured debt |
| Rent arrears | Risk of eviction | Sometimes, with care |
| Council tax arrears | Enforcement agents and, rarely, prison | Usually yes |
| Gas and electricity arrears | Prepayment meter or supply issues | Usually yes |
| Income tax and VAT (HMRC) | Strong recovery powers | Usually yes |
| Magistrates' court fines | Enforcement and possible prison | No |
| Child maintenance | Deductions and enforcement | No |
| Hire purchase / logbook loans | Vehicle can be taken back | Usually dealt with separately |
Non-priority debts
These are still important, but the consequences of falling behind are less severe. Most can be included in an IVA, a DMP, a DRO or bankruptcy.
Student loans
Student loans from the Student Loans Company can't be included in an IVA, DRO or bankruptcy. Repayments are taken through the tax system based on your earnings, so they're usually manageable and are factored into your budget.
Bailiffs and enforcement agents
If enforcement agents are involved, act quickly. Council tax and court debts can lead to enforcement visits. A Breathing Space can pause most enforcement action while you get advice.
Unsure what to prioritise? Free, confidential debt advice is available from MoneyHelper, or send us an enquiry and we'll talk you through your options.