Advice column

Priority debts
March 2016 

"I recently lost my job and fell behind on several bills including my council tax, electricity and credit cards. I’m back in work and keen to start paying off my debts, but can’t afford to pay them all straight away.

What should I pay off first?"

First off, draw up a list of who you owe money to, how much you owe, and which of these are ‘priority debts’.
Priority debts include your rent or mortgage, gas and electric and council tax. These debts should always be paid first as delaying payment can have serious consequences such as having your energy supply cut off, or losing your home. You can use any spare income to tackle your credit cards and personal loans. 

You’re now ready to start negotiations with your creditor. Put together a letter - otherwise known as a “financial statement” - explaining why your ability to repay has been affected, including a full breakdown of your monthly income and outgoings and what you think you can pay. To work out exactly how much you can afford to repay, you’ll need to compare your monthly income to your essential outgoings and see how much money you’ve got leftover to put towards your debts. Citizens Advice has an online budget tool which can help.

Send this letter to your creditors and they will use the information to help settle an affordable repayment plan with you.

For more guidance on putting together your budget and financial statement, go to or contact us on 03444 111 444 or drop into your your local Citizens Advice.
Get your finances heading in the right direction
You can also download our booklet Get your finances heading in the right direction below, which is packed with information, tips and advice about how to blitz your budget, get the best deal on your energy supplies, water down your water costs, sort out debts and maximise your income.


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