What is considered priority debt in Northern Ireland?

While it is important to make sure you keep on top of all of your outstanding debt commitments to ensure your credit record remains unblemished and to prevent yourself from incurring late penalty payments, there are some outgoings that should be prioritised above all others.

These are known as priority debts, and as the name suggests, keeping up to date with the minimum payments due on these accounts should be seen as a priority. While you may think priority debts are those which are the largest, this is not necessarily the case. Priority debts have nothing to do with the amount of money owed, but instead, the severity of the consequences associated with not paying them.

Priority debts in Northern Ireland differ from those in other areas of the UK. In Northern Ireland, priority debts include but are not limited to:

• Mortgage and rent arrears
• Secured loans
• Ground rent/service charges
• Gas and electricity
• Rates
• Child maintenance arrears
• Criminal fines
• TV license
• Water

If you have any of these debts, your focus should be on keeping up with the repayments associated with them as best you can.

Priority debts are seen as such as the consequences for not paying them can be severe. Depending on the debt type, not paying these priority debts sees you at risk of losing your home, having essential utilities cut off, and even being given a prison sentence in the most severe cases.

Not paying a non-priority debt, such as a credit card, will not have the same sort of consequences, although it goes without saying that you should of course pay these debts too if you are able to do so.

If you cannot pay your priority debts, you must take action by enlisting professional debt help as soon as you can. This will help prevent the situation from spiralling out of control.

If you have fallen behind in your priority debt payments, the worst thing you can do is to ignore the problem. The consequences of not keeping up with your priority debts can have a very real impact on your day-to-day life. Not paying your mortgage or rent can easily lead to you becoming homeless, while not paying your gas bill can see you being left without heating and hot water.

Entering into a formal insolvency process, such as an Individual Voluntary Arrangement (IVA) can be an appropriate option for those who have no realistic chance of being able to repay their debts.

While not all debts can be included in an IVA, many common debts can. These include:

• Credit cards
• Personal loans
• Overdrafts
• Gas, electricity, and water arrears
• Payday loans
• Store cards and catalogue debt

While this list does include some priority debts, others such as mortgages and rent arrears, cannot be repaid under an IVA and will have to be repaid separately.

This does not necessarily mean that an IVA is not helpful when it comes to dealing with priority debts, however. As an IVA can considerably reduce the monthly repayments due on other forms of borrowing, this can free up more disposable income which you can put towards paying down your priority debts.

If you are struggling under the weight of debt you cannot afford to repay, contact the experts at Northern Ireland Debt Solutions for immediate help and advice. Our specialist debt advisers will talk you through the various debt solutions open to you – which may include an IVA – before recommending the best option for you based on your individual situation. Call the team today and take the first step.