Extra help
In this section, we give information and advice on some
non-priority debts that can be more difficult to deal with.
They are:
- charge cards;
- payday loans;
- catalogue debts;
- personal debts to friends and family; and
- non-priority business debts.
Charge cards
You may have a debt on a charge card such as American
Express, where you have to pay the full balance off each
month rather than in instalments as with a credit card.
It can be more difficult to negotiate reduced offers of
payment on charge cards as they are not ordinary credit
agreements. You should still include them with your
other non-priority debts. If your charge card company is
threatening to take further action, contact us for advice.
Payday loans
A payday loan is a short-term loan, usually for a small
amount of money. Many people use these loans to help
them if they have run out of money before their next
payday. The interest rates on these types of loans can be
very high. Charges will also be added if you cannot pay the
loan back on payday. This means that the debt can build up
so you end up owing a lot more than you borrowed.
See our fact sheet:
A payday loan is a non-priority debt, but it can be difficult to
deal with as you may have given what is called a ‘continuous
payment authority’ to the loan company. This means that
you have given the loan company permission to take money
from your bank account. You may not realise you have given
this permission, but you can get a continuous payment
authority stopped by telling the bank or the payday loan
company. Contact us for advice.
Catalogue debts
Extra advice:
liability of agents
If you act as an agent for the catalogue
company and sell goods, or collect money
for the company, you need to be careful. You
should create a separate account for each of
your customers. If you do not do this, then the
catalogue company may hold you responsible
for any payments missed by your customers.
As long as you set up separate accounts, you
(as an agent) should not be held personally
liable for your customers’ missed payments.
Mail order catalogues offer a way of buying goods by post
and spreading the payments over a period of, typically, 20
to 40 weeks. Orders for goods and the collection of payments
are sometimes undertaken by a local part-time agent; often this is
a friend, relative or neighbour.
You should treat catalogue debts as a non-priority debt in the
same way as your other non-priority debts. Goods ordered
from a catalogue belong to you and cannot be taken back if
you do not pay. If you have a dispute with the company or an
agent about how much you owe, contact us for advice.
Personal debts to friends
and family
You may owe money to friends and family. You should usually
treat these debts the same as ordinary non-priority debts and
make offers of payment in the same way.
You may be able to agree to make no payments until
your circumstances improve, so you can pay off your other
creditors faster. Sometimes, you may want to make higher
payments on a personal debt because lending you the
money has caused hardship to someone you know, or your
relationship may suffer if you don’t. This can be difficult,
as your other creditors may be unhappy if you are paying
more on a personal debt than is strictly ‘fair’. You need to
explain the reasons to your other creditors and point out,
for example, that if you pay off the personal debt quickly,
you will be able to pay more to everyone else.
Non-priority business debts
If you do not need to continue to trade with a particular
supplier or service provider, you could treat any debts you
have with these companies as non-priority debts. However,
you may need to take care as some business suppliers are
more likely to take court action, or make you bankrupt. If you
are not sure whether to treat a business debt as a priority or
a non-priority debt, contact us for advice.