Some debts carry more severe penalties than others and this means that they must be dealt with first. Priority treatment is not determined by the size of the debt, the period or amount of arrears or the threats being made, but by the actual legal remedy the creditor has against you for recovery.

A PRIORITY debt is usually defined as one where non-payment can result in you:

being imprisoned
losing your home
losing essential goods or services.

Below is a list of priority debts and the legal consequences of nonpayment:

PRIORITY creditors must be dealt with before any offers or payments are made on SECONDARY debts. SECONDARY debts are all those which do not carry the above sanctions. For example:

* If the threatened goods are an essential requirement, for example a washing machine or car needed for work, such a debt must be treated as priority, but if you have paid less than one third of the total owed under the hire purchase agreement the creditor can repossess the goods without a court order.

**Catalogue debts may be difficult to enforce as it is not always standard practice to complete a formal credit agreement, and creditors should be asked to produce a copy of this if proceedings are threatened.

***Individual circumstances may suggest some other debts be treated as priority, although not legally enforceable, e.g. money owed to family, friends or loan sharks.

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