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. Residents need to be encouraged to recognise the importance of paying these first or agreeing acceptable terms:

  • Mortgage/secured loan*
  • Rent payments*
  • Council Tax
  • Business rates
  • Gas, electricity
  • Phone /internet bills**
  • TV licence
  • Tax credit overpayments
  • Tax debts
  • Court fines
  • Maintenance/CSA payments
  • Income tax, National Insurance and VAT
  • Hire purchase agreements **

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

** these bills may be priority if there is a disability or it is necessary as the resident is looking for work/ needed for their employment

Non-priority debts

Non-priority debts can lead to County Court action and being ordered to pay what they owe. These debts still have to be paid but residents 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 card/ store card debts
  • Parking penalties
  • Catalogue debts
  • Money borrowed from family and friends

Where residents engage the assistance of debt advisors they will ensure they are prioritising these debts accordingly