Priority and Non-Priority Debts

When an individual finds themselves in financial difficulty, it is important that they prioritise their financial commitments. A loan secured on the home, rent, rates, electric, food, heating, lighting are all what is known as priority debts and need to be maintained as best as possible, the remainder are what is known as non- priority debts and can be dealt with by communicating with the creditor. Priority and non-priority debts are determined by the sanction the creditor has with certain debts; for example, a mortgage is a priority debt because non payment can lead to repossession. The needs of the individual will also make a debt a priority or non-priority debt. For example food is a priority because you cannot survive without it. Rent is another priority debt as it could lead to eviction if not maintained. A credit card debt is not a priority as the debt is not secured and therefore the creditor sanctions are not as severe.