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Different types of debt

  • Credit debts
    Credit debts are usually classed as non-priority debts. This means the action that creditors can take against you to recover their money is usually less severe than for debts such as mortgage arrears and council tax arrears.
  • Business debts
    If you own your own business and are having financial difficulties, link straight to Business Debtline (external website). Also find details of its free business debt advice phone line.
  • TV Licences
    If you do not have a TV Licence the matter will probably be referred to the Magistrates' Court in order to fine you. If you do not pay a Magistrates' Court fine you could be imprisoned.
  • Child maintenance arrears
    The CSA usually collects payments from parents who are receiving Income Support or Income-based Jobseeker's Allowance and who do not live with their children. It may also collect from other absent parents.
  • Council Tax arrears
    Arrears of Council Tax or Poll Tax should be treated as a priority debt because of you do not pay, your Local Authority can take you to court.
  • Hire purchase payments
    A hire purchase or conditional sale agreement is where the company that has supplied you with the finance owns the goods until you have made the final payment.
  • Income Tax and VAT arrears
    If you owe Income Tax to the Inland Revenue or VAT to Customs and Excise, you should treat these as priority debts. Both Customs and Excise and the Inland Revenue can instruct bailiffs to take goods from your business or home without having to get a court order first. They may also petition for bankruptcy as a way of forcing you to repay the debt. Find out more from National Debtline's factsheet on Business Debt (external website).
  • Magistrates' Court fines
    If you do not pay the fine, the court can issue a warrant for your arrest and, ultimately, you could be imprisoned for non-payment.
  • Water Rates arrears
    Water companies can no longer disconnect a domestic supply if you fall behind with the payments.
  • Gas or electricity arrears
    Arrears of gas or electricity should be treated as a priority debt because the utility companies have the authority to cut off your power supply if you do not pay your bill.
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