Non-priority debts are less important than priority debts. You should still try to pay them what you can afford, but only after you have paid any priority debts. The consequences of not paying non-priority debts are likely to be less serious.
Non-priority debts could include:
- credit card bills
- unsecured loans
- an overdraft on a bank account.
Debt collection agencies
Creditors can employ debt collection agencies to collect debt on their behalf, or they may sell your debt to these agencies. This means debt collection agencies may contact you about money you originally owed elsewhere. Collection agencies can also sell your debts to one another, which can make it even more confusing for you. It can be difficult, but you need to keep track of who each debt is owed to.
It is important to remember that debt collection agencies are not court officials and don’t have the same power as bailiffs. Some of these agencies can make you feel threatened. They may even be connected to a firm of solicitors, which makes them sound very official. This doesn’t give the agencies any extra authority or make their debts a higher priority. Whatever they tell you, these agencies have no greater powers than the original creditor.
If you feel harassed by debt collectors, you can make a complaint. Call the Citizens Advice Consumer Helpline on 03454 04 05 06 for further information.
Be careful to treat all of your creditors the same. It is essential to pay them all a fair share from the money you have available. Don’t make a big payment to just one or two creditors. If any creditor feels they are being treated unfairly, they may be more unlikely to make an agreement with you.
You may find it useful to make a list of your debts. Remember to update it regularly. Amounts can go down if you make regular payments that are large enough. Likewise, your debt can actually go up if you make smaller payments. For example, this could happen if:
- the payment does not cover the increasing (accruing) interest
- the interest rate increases
- you are charged for late payments.
County court judgments
Many creditors may threaten county court action if you fall behind with payments and are unable to pay the suggested amounts. If the creditor takes you to the county court because of the debt, the financial statement will be very useful for you to identify your available income.
In most cases, you won’t have to attend a court hearing and it will be dealt with through the post. The court will write to you and order you to pay an amount. This will be based on the financial statement you have completed and any requests made by the creditors.