How to Prioritise Your Debts

It can be overwhelming to know where to begin when paying off your debts, especially if you have many different types of debts. For instance, you may owe money through credit cards, utility bills, or loans. It may be the case that you can consolidate your debts, or it may be that a small loan like a£200 loan or perhaps a £500 loan could help you get back on your financial feet.

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When you owe money in any form, things can start to add up and become quite overwhelming. However, being able to prioritise your debts and identify which are the most pressing can help you manage your finances so that you can quickly get back on track.

Why is it Important to Prioritise Your Debts?

Different debts incur different consequences if they are left unpaid, some of which are more serious than others. You should always assess your debts to decide whether they are priority debts, non-priority debts, or debt emergencies.

What Are Priority Debts, and Why Should They Be Repaid First?

If you have limited income, you need to first look at your ‘priority debts’ and make your largest payments here as efficiently as you can.


The highest priority debts include:

  • Rent or mortgage payments

  • Energy and water bills

  • Payments that are essential for work, childcare, medical appointments, and essential goods

  • Council rates or body corporate fees

Failure to repay priority debts may lead you to needing to declare bankruptcy or needing an IVA, both of which can be detrimental to your credit score and ability to borrow money in the future.

How Do You Prioritise Other Debts?

Once your priority debts are under control, you should look at your other debts or your ‘non-priority’ debts. These are the ones which have less serious consequences and can be put off while you deal with your time-sensitive debts. Remember, though, that having any outstanding debt beyond what is absolutely necessary can be very detrimental to your credit score and will put additional financial pressure on you.

Non-priority debts might include:

  • credit card debt
  • unsecured loans
  • overdrafts
  • money borrowed from friends and family
  • unpaid parking tickets

Although you may need to borrow money to repay these debts, they usually will be of a lower amount and concern than priority debts.

If you do not pay your non-priority debts on time, it is possible that your creditor could take you to court or send bailiffs to collect money from you. However, before taking serious action, some creditors may be willing to help you with a repayment plan. You can usually speak to the providers of your non-priority debts to try and work out a new agreement or buy yourself some time before action is taken.

What About Financial Hardship Arrangements?

For some non-priority debts, you may be able to request financial hardship arrangements from your creditors. This means that you may be able to work out a more flexible repayment plan that suits your financial situation, and you could buy yourself some time while you are managing your other debts.

It might be worth looking at Internet and phone bills, payday loans, or credit cards to see if you may be able to request a new arrangement. Ultimately, it will help you budget more effectively and repay the debts you owe as soon as possible.

What Are Debt Emergencies?

Debt emergencies are debts which have potential legal implications. This could be if a creditor has taken legal action against you, issued a court judgement, or served a creditor’s petition or bankruptcy notice.

If you have legal action taken against you, your debt will be a higher priority as you cannot simply ignore it. In the case that legal action has been taken against you, you should seek advice as soon as possible and make this debt a priority, as failure to pay could leave you with a county court judgement (CCJ) against you, which will be detrimental to any future applications for loans or lines of credit.

If you are disheartened and weighed down by your debts, just remember that the worst thing you can do is ignore your debts and leave them to mount. Doing this will only worsen the situation.

It is always worth trying to appeal to your creditors and make new arrangements, especially if your financial situation has changed unexpectedly. Even if you are able to pay a small amount rather than the full amount, your creditors may be able to delay any legal action against you and give you more time to deal with your debts.

Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
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