Some bills that you receive are regarded as priority debts because the consequences of not paying those priority debts are greater than the consequences of not paying your other non-priority debts such as credit cards.
For example, if you don’t pay your mortgage, your home could be repossessed. If you don’t pay your rent, you could be evicted.
Fortunately, during the Coronavirus lockdown, there has been some leeway granted with mortgage payment breaks and protection against evictions. increased prevention against credit enforcement action such as wage arrestment with added legal protection against Sheriff Officers. However, this doesn’t mean that you should ignore your debts; think of it more like breathing space until things get back to normal.
You must always pay these priority bills before your other debts. Even with Coronavirus measures in place, where possible, these debts should be paid as priorities, because the consequences of non-payment can be serious.
If you have unaffordable, unsecured debt that’s making it more difficult to pay your priority bills, then it’s really important that you get free and confidential debt advice as soon as possible.
Remember to always get any payment breaks confirmed with your lenders – never assume that it’s an automated process. If you’ve been made redundant and forced to claim Universal Credit, or you have been furloughed – these may be enough to reorganise your priority and non-priority debts – however, make sure you get proof of this as the lender will usually ask for proof of your change of circumstance.
Your unsecured debt is classed as ‘non-priority’ because the consequences of not paying these each month are much less severe than not paying your priorities each month.
Trust Deed Scotland® can take a look at these debts with you and give expert debt advice and if they are unaffordable, we can provide solutions on how best to pay these debts while you ensure that you’re on top of your most important priority debts. Trust Deeds, Debt Arrangement Scheme, and other tools exist which allow you to reduce unsecured debts down to a more affordable level.
What Is A Priority Debt In Scotland?
|Type Of Priority Debt||Consequences of Non-Payment||Coronavirus – New Conditions Introduced?|
|Mortgage||Repossession||Payment Holiday of up to 3 months|
|Rent||Eviction||Government protection in place to prevent evictions. Landlords must give 3 months notice before eviction can proceed, and Court hearings have been suspended|
|Secured Loan||Repossession||Payment holidays of up to 3 months – contact your lender as they may also have other measures in place in addition to payment holidays.|
|Council Tax||Wage Arrestment Goods taken from your home Sequestration Debt secured against property||Individual local authorities will have different ways to deal with council tax payments and arrears, however, there is a further council tax reduction for those whose bill is already reduced. Contact your local council before missing a council tax payment.|
|Child Maintenance Arrears||Vehicle removed Goods taken from your home Money taken from wage, benefits and/or your bank account||The Child Maintenance Service (CMS) is not currently chasing missed payments.|
|Criminal Fine||Vehicle removed Goods taken from your home Money taken from wage, benefits and/or your bank account||No Coronavirus special conditions created for non-payment of Criminal Fines|
|Tax, VAT or NI||Vehicle removed Goods taken from your home Money taken from wage, benefits and/or your bank account PAYE tax code adjusted to recover debt through higher tax Sequestration||HMRC have introduced special Coronavirus measures to help those with Tax, VAT and National Iinsurance issues, depending on your individual situation.|
|Decree (Scotland’s CCJ Equivalent)||Vehicle removed Goods taken from your home Money taken from wage, benefits and/or your bank account||Visits from Sheriff Officers have been suspended due to Coronavirus restrictions but this won’t last long however, no special measures have been announced. If you have been threatened with enforcement action such as Wage Arrestment, you can take action now to prevent this from happening.|
|TV Licence||A criminal fine||TV Licensing has agreed that any missed payments can be repaid once the Coronavirus restrictions returns to normal.|
|Electricity & Gas||Disconnection of your service Prepayment meter fitted Decree Money taken from wage, benefits and/or your bank account||Action to disconnect supplies has been suspended. Most energy suppliers will have some Coronavirus measures in place to reduce your bill or pause payments.|
|HP, PCP & PCH||Repossession of your vehicle Decree||HP, PCP and PCH car finance lenders are giving up to 3 months payment breaks.|
|Logbook Loans||Repossession of your vehicle Decree||Logbook loan car credit providers are giving up to 3 months payment breaks.|
|Telephone & Broadband||Disconnection of your telephone and/or broadband service||Most telephone and broadband suppliers have special Coronavirus measures in place to help you stay connected. Each vendor will have different conditions available, therefore you should contact them as soon as possible.|
What Is A Non-Priority Debt In Scotland?
Failing to pay non-priority debts is usually less serious than not paying a priority debt. The most important debts that you have are not necessarily the biggest ones.
You can’t be sent to prison for not paying non-priority debts. However, your creditors may take enforcement action against you if you do not pay them.
All non-priority creditors should be treated fairly. You should not make full payments to one creditor while reducing payments to another. If you cannot afford the minimum payment to any of your non-priority debts, you should make reduced payments to all of them using a pro-rata calculation.
Failure to do so could result in your debt being passed on to a debt collection agency and a Decree (CCJ in Scotland) being made against you.
More likely, the non-payment of unsecured debts will firstly result in a default notice being served against you.
When a default notice is issued against you for missed payments, you will find your credit rating is affected.
Contact Trust Deed Scotland® for advice on 0141 221 0999.
Non-Priority Debts in Scotland include:
Credit card debts, store cards, and personal loans. Bank overdrafts, payday loans, catalogue debts.
Money that you borrow from your friends and family is also regarded as a Non-Priority debt.
If you have unaffordable debts and you’re struggling to repay them all, don’t worry you’re not alone. an expert debt advisor can help you separate your priority and non-priority debts before explaining what options may be available to you for dealing with them.
Struggling With Non-Priority Debt In Scotland?
If you’re struggling with non-priority debt in Scotland – Work out your budget to check how much you have left each month after all your household bills have been paid.
You can then use any surplus income to clear your priority arrears as quickly as possible. You can discuss your circumstances with your creditors and offer reduced payments to non-priority debts – this will help free up as much surplus as possible for the priority arrears.
Then, when you contact your non-priority creditors, explain why you’re in debt. If you can’t make an offer of repayment straight away, ask for more time, for example, 14 or 28 days. This will give you more time to get expert advice and work out your budget longterm.
It’s important to try to pay at least the regular instalment in the meantime. If you can’t do this which is understandable, pay as much as you can afford – even a payment of £1 to the non-priority debt shows a commitment to repay your debs and again allows you time to get help as soon as possible.
If you feel like you’re really struggling with unaffordable debts – Don’t worry. You’re not alone.
Trust Deed Scotland® have helped thousands of people in Scotland become debt free since 2009. We have dealt with cases that included council tax arrears, credit card debts and payday loans. We’ve successfully prevented and lifted creditor enforcement actions such as Wage Arrestments.
Whatever the cause of your money problems, we can help you find the way out and let you focus on life after debt.
If you have over £3,000 of unaffordable, non-priority debt, and live in Scotland, Trust Deed Scotland® will help find the right solution for you.
Contact us on 0141 221 0999, or find out which solutions you may qualify for by using our free debt calculator tool online.