Prioritise your debts

When you’re struggling financially, it can be hard to know which debts to prioritise. But if you can prioritise, it will help you get back in control.

Some debts may be more important than others – and that’s why we talk about ‘priority’ debts. Work out which are your priority debts and always pay those first, while seeking the best solution to address other debts.

Don’t give up! There are always options available and people who can help.

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Things to consider when prioritising your debts


Make highest payments to highest priority debts

When you have limited income, you soon realise that the consequences of not paying some debts are more serious than others. So, make your highest payments to the highest priority debts.

The highest priority debts are:

  • rent or mortgage payments (so you have somewhere to live)
  • council rates or body corporate fees
  • car payments for a car that is essential for work, children, getting essential goods or medical appointments
  • energy and water


Pick a few debts to request financial hardship

If you have other debts than the priority ones above, pick a few to request financial hardship arrangements from your creditors. Debts to consider are:


Deal with debts with legal implications

Some debts can become a higher priority if they have legal implications, such as:

  • legal action has been started against you
  • the creditor has a court judgment and is trying to enforce the debt
  • a bankruptcy notice or creditor‘s petition has been served on you

These type of debts can’t be ignored. Get advice quickly.


General considerations

There are many other things to consider that will determine how best to tackle your debts, including:

  • your age
  • actual or possible changes to your working hours or income
  • how long your income will be reduced
  • the value of the assets you could lose if the debt isn’t paid
  • your creditors and the rights you have to seek hardship variations
  • whether the debt is secured over an asset
  • the amount of the debt and the interest rate that applies
  • whether a creditor is taking legal action against you and what stage the legal action is at

Our tips

  • Don’t ignore your debts
  • Don’t give up: keep trying to make arrangements with your creditors
  • If you pay something, your creditors may delay action against you and give you the opportunity to deal with the debt
  • The sooner you take action to tackle your debts the more options you have. Don’t delay; prioritise your debts today

When you have a reduced income and multiple debts, you might struggle to prioritise your debts. Call us on 1800 007 007 if you need help.

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