Not all your creditors have equal standing if the worst happens and your finances become subject to legal proceedings. Making sure that you pay Preferred Creditors as a priority may mean that you avoid the most serious consequences, which can include the repossession of your home or other possessions, the disconnection of vital services such as electricity, or even imprisonment.
Identifying ALL your creditors and dividing them between Preferred and Secondary status needs to be the first priority. Once this has been done, Western Capital would work out a strategy to minimise the legal consequences that you could be exposed to. Preferred Creditors include:
The most common Preferred Creditors are:
Mortgages
Secured Loans
Income Tax
National Insurance
VAT
Council Tax
TV Licence
Water/Gas/Electricity
Court Fines
Hire Purchase
Maintenance Arrears
Secondary Creditors have a reduced ability to recover debts, but this does not mean that you should ignore their requests for payment. Secondary Creditors include:
Credit or store cards
Unsecured loans
Disconnected mobile phones
Catalogue/mail order debts
Loans for certain other possessions
