Policy Corporate Debt policy

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11. Appendix 1

Priority debts

Priority debts are those that can result in the loss of a home, loss of essential services or imprisonment. Customers need to be encouraged to recognise the importance of paying these first or agreeing acceptable terms:

  • Mortgage/secured loan*
  • Rent on your home*
  • Council tax and business rates
  • Gas, electricity and water
  • Benefit overpayments
  • Tax credit overpayments
  • Tax debts
  • Court fines
  • Maintenance/CSA payments
  • Income tax, National Insurance and VAT
  • Hire purchase agreements (for essential items only)

*Non-payment of these debts could result in loss of the home. If other debts have been given priority instead, we may not have a duty to help re-house the debtor.

Non-priority debts

Non-priority debts may not result in customers losing their home or imprisonment but it can lead to county court action and being ordered to pay what they owe. These debts still have to be paid but customers need to be aware that they should not be given higher importance than paying priority debts.

Examples of non-priority debts include:

  • Civil debts
  • Overdrafts, loans (unsecured), hire purchase agreements
  • Credit cards
  • Parking penalties
  • Catalogue debts
  • Money borrowed from family and friends