COMMENT
How To Prioritise Debts

Anyone being chased by creditors will know that it's not much fun. There's also the temptation to rob Peter to pay Paul especially if Paul's shouting loudly enough for his money!

However, be careful that you don't fall into the trap of paying the wrong bills if you haven't got enough money to spread amongst all your creditors. Some of them have more power than others and they're the ones you need to pay attention to first because the consequences of not paying them can be severe.

Priority debts include:

• Non-payment of rent - the landlord can get a court order to evict you;
• Failing to keep up mortgage repayments - the lender can ask the court to make an order to evict you and sell your home;
• Failing to pay fuel bills - your gas or electricity can be cut off;
• Failing to pay the phone bill - the phone can be cut off;
• Non-payment of Council Tax - you can be sent to prison;
• Non-payment of Income Tax - the Inland Revenue can take bankruptcy proceedings;
• Non-payment of court fines - you can be sent to prison.

The golden rule is never to ignore priority debts. Any available money should always be used to pay these first before paying your secondary creditors. Unsecured loans, credit cards, hire purchase agreements, store cards, catalogues and mail order are all examples of secondary creditors' bills which should be further down your payment list.

Remember too that if you're finding it hard to juggle your money between creditors you can get help for free from the likes of the Consumer Credit Counselling Service and Payplan who will set up a debt management plan and deal with your creditors for you.

Learn how to Get Out Of Debt and join our Dealing With Debt discussion board for support.