personal finance

The debts that should worry you most and the ones more likely to see the bailiffs knocking


Being in debt can be extremely stressful and leave you feeling overwhelmed.

And, with Christmas less than two months away, financial pressures on many families will increase in the coming weeks.

Problems start when debts get out of hand, leaving you unable to pay back what you owe.

In those cases it is very important to pay off debts in the right order as the consequences of not paying off some debts before others can be serious, as the Money Advice Service explains on its website.

The Government has advice on its website as well.

Emergency debts

A metal grille is put on a window of a home after bailiffs cleared the property

These include – court action, bailiff action, disconnection and eviction for mortgage and rent arrears.

People in this situation should get free, independent advice from organisations such as Citizens’ Advice.

Debt advisers give advice on what to do next, as well as speaking to the court or creditor on your behalf.

Priority debts


These include – court fines, council tax, TV licence, child maintenance, gas and electricity bills as well as mortgage and rent arrears.

Priority debts are those that carry the most serious consequences if you don’t pay them – such as losing your home. They don’t have to be the largest or the ones with the most expensive interest rates.

Not paying off priority debts could lead to a visit from bailiffs or receiving a court summons. You could also have your heating or lighting cut off or even lose your home (if you are not keeping up with mortgage or rent payments).

Non-priority debts


These include – overdrafts, personal loans, credit card/payday loans / store card debts or money borrowed from friends or family

The consequences of not paying non-priority debts are less serious, but a creditor could eventually take you to court or instruct bailiffs to collect the money.

Dealing with rent arrears


Citizens’ Advice recommend speaking to your landlord straight away if you miss a rent payment, and pay them what you can as well as asking them for more time to pay the arrears.

In certain situations, landlords can start the eviction process straight away after a payment is missed.

They can do this if the tenant has been late with the rent before, the tenant is already in arrears, or the fixed term period of a tenancy has ended.

In those cases, the court will normally grant landlords a ‘possession order’ very quickly and you’ll be told to leave within 14 days.

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There are different rules if your landlord is a local authority or housing association. For instance, this is what Cardiff Council told us:

“Cardiff Council takes a very proactive approach to rent arrears, intervening at an early stage to stop them escalating.

“A specialist Welfare Liaison team will visit the council tenant in their own home to maximise income and address any debt issues.

“Tenants can also access a wide range of services within the council hubs, including specialist money and debt advice and help to get back to work.

“Before any legal action is taken for rent arrears, the tenant will be invited to attend a rent review panel, where a range of help is available to address any issues. Legal action is taken only as a last resort, after all possible action has been taken to assist the tenants.”


And this is when Tai Gwalia – which manages nearly 5,000 homes mainly across Swansea, Carmarthenshire, Neath Port Talbot and Powys – triggers the process of collection of arrears:

– A first letter is sent after two weeks rent is owed or £100

– A second letter is sent after three weeks rent is owed or £200

– Notice of Intention to Seek Possession: four weeks rent or over £200 owing and arrears have increased since letter 2, or there has been no contact from tenant to make an agreement to clear the debt or an an agreement made has been broken.

A spokeswoman for Tai Gwalia said that in all cases they made every effort to contact the tenant whether it be by telephone, e-mail, text or home visit.

She said: “If we receive confirmation that all information has been submitted in respect of a Housing Benefit or Universal Credit claim then we will not progress to the next stage.

“We want initially to ensure we offer people the help and support they need to manage debt in its early stages, as stress free as possible.”

To find out more on how to reach an agreement with your landlord, you can visit here.

Council tax arrears


Councils will usually send a reminder letter if you’re more than 14 days late paying a council tax instalment, according to debt advice charity StepChange.

If you make the payment within seven days of the reminder letter you can continue paying your council tax in instalments.

However, if the payment isn’t made within seven days, local authorities can ask to pay the whole council tax for the rest of the year.

You have another seven days to pay the whole amount, then the local authority can take you to court. The court process differs depending on where you live.

Going to court can add hundreds of pounds to debts, as you will have to pay court costs and possibly bailiff fees on top of your debt.

In extremely rare cases, people can be sent to prison for up to three months for deliberately refusing to pay their council tax.


For instance, this is what Swansea Council does about council tax:

“A reminder notice is sent to a council tax payer whose monthly instalment is 14 days past the due date.

“Our aim is always to encourage taxpayers to engage with us as soon as they find they have difficulties making their payments so we urge council tax payers to contact the council tax section who will work closely with them to support those who are experiencing debt problems.

“This will include providing advice on how to claim council tax reduction if they are on a low income, or council tax discounts or exemptions if they are eligible. Information on reducing the amount of council tax to be paid can be found here.

“Council tax payers are also informed of free impartial debt advice agencies such as Citizens Advice in case the financial problems are more serious.

“Enforcement action is always a last resort after all other opportunities and approaches have been exhausted, but we do take all the steps we can to collect council tax as it would be unfair and unreasonable to those who do pay their council tax if we did not.”

Find out more about council tax arrears here.

Household bills

Citizens Advice has seen a sharp increase in the number of people getting in touch with it because of household bills – in 2018, it helped people with 690,000 household bill debt problems, compared to 350,000 consumer credit issues.

Falling behind on your gas or electricity bills could lead to them being disconnected.

Water and sewerage bills are classed as non-priority debts, but they are an ongoing service that needs to be paid for. If you don’t pay at least your current water and sewerage bills, the amount you owe will continue to go up.

Consumer credit debt

Photo credit should read: Andrew Matthews/PA Wire

As debt charity StepChange explain on its website, most types of consumer debts in the UK are regulated by the Consumer Credits Act 1974. This Act states your rights as well as the actions creditors can take if you fall behind, for example.

Consumer credit debts cover credit cards, which are a popular way to buy items – but can be an expensive way to borrow.

If you don’t pay the minimum payment every month, your account will go into arrears. At that point, your creditor will get in touch demanding the missing payments are made.

If you don’t do this, eventually the account will default and further action may be taken. A default on an account shows that previous debts have not been paid and, if you apply for credit in the future, creditors who check your credit file will see this.

As a result it might be harder to take out loans, credit cards or open certain bank accounts.

To find out more about different consumer credit debts, visit here.



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