7. Dealing with priority debts

The next stage of the debt advice process is to deal with priority debts. See Chapter 8 for more on this. This tries to ensure that the threat of homelessness, the loss of essential goods or services or the threat of imprisonment is removed. It is essential that arrangements for priority debts are agreed at this stage. This allows payments towards priority debts to be included in the expenditure, rather than showing in the financial statement as income available for non-priority creditors (see here).

Priority creditors might demand to see a financial statement when negotiating priority debts, and so this stage of the process can overlap with Stage six.

Explain each available strategy, with its advantages or disadvantages, to the client. They may need to consult with a partner or other family member, so provide the information in writing if possible. Once agreed, you can then implement the strategy by negotiation or a court application. The client must carry out their own agreed course of action – eg, start paying rent or set up direct debits. You must always confirm with the creditor, in writing, a strategy agreed verbally, and request a written acknowledgement. Advise the client to start making any agreed payments immediately and not wait for confirmation from the creditor.