Some debts are more important than others. The law gives different creditors different ways of getting their money back.
If you don't act quickly, some creditors could: take away your home (called 'repossession' or 'eviction'); cut off your gas or electricity (disconnection) - the law has changed and your water company cannot disconnect your water supply; send the bailiffs to take furniture from your home (called 'distraint'); or ask the magistrates' court to send you to prison.
The chart below tells you what might happen if you delay sorting out different debts.
These are all priority debts. It is important to use your money for creditors to make agreements to settle these debts first.
Creditors can take action on some priority debts without going to court first. For example, gas and electricity companies can disconnect you. HM Revenue & Customs can send bailiffs without a court order for VAT and income-tax debts. Your other priority creditors can take action against you only after court action.
But don't panic. You will always be given warning and, as long as you act quickly, you should be able to stop these things happening.
|
Debt |
Possible action against you |
|
TV licence |
Fine in magistrates' court, distraint
or imprisonment
|
|
Mortgage arrears |
Repossession of your home |
|
Second mortgage or secured loan |
Repossession of your home |
|
Rent arrears |
Eviction from your home |
|
Council Tax and community charge |
Distraint or deduction from wages,
deductions from some benefits or
imprisonment
|
|
Gas or electricity |
Supply cut-off |
|
Magistrates' court fines |
Distraint or deduction from wages,
deductions from some benefits or
imprisonment
|
|
Maintenance |
Distraint or deduction from wages,
deductions from some benefits or
imprisonment
|
|
Hire purchase or conditional sale |
Repossession of the goods or a court
order to hand them back
|
|
Income tax, National Insurance
and VAT arrears |
Distraint or bankruptcy |
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