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Whether you’re seeking out an organised debt management plan or you’re trying to resolve your debt problems alone, one of the most important things to do is to prioritise your debts. If you have debts from multiple creditors, deciding which ones are the highest priority can be difficult.

Here are the highest priority debts you should look to clear as soon as possible.

Mortgage or Rent Arrears

The simple fact of the matter is that if you fail to pay your rent or mortgage, you could lose your home. With mortgage arrears, you could even face legal action and the lender you take possession of your home. With mortgage arrears, your landlord could evict you, leaving you without a home and still owing the money. As soon as you find yourself in any difficulty meaning you cannot afford your mortgage or rent, you should contact your lender or landlord as soon as possible and explain the situation fully. Treat this as a high priority payment.

Tax, National Insurance and VAT

Failing to pay tax could lead to bankruptcy and potentially even criminal proceedings against you. This is certainly a high priority debt.

Council Tax

Again, this is a debt that should be considered high priority, as failure to pay could result in legal action against you. Hire Purchase Agreements on Essential Items. While hire purchase payments against non-essential items should be considered low priority, essential items that require a monthly payment should be high priority. Examples include a car that you use for getting to work. Any item where losing it will inhibit your ability to go to work or to live is an essential item.

Gas and Electricity

Gas and electricity companies have the right to cut the supply to your home if you fail to pay and as such this is again a high priority bill. Of course you should pay your water bill as well – though water cannot be cut off and as such should be treated as a lower priority debt.

The final problem with credit card purchases is directly related to a more emotional dimension of these purchases — debt. Americans are accumulating record amounts of debt at breakneck speed, perhaps because of the overabundance of great credit card offers. Credit card companies love to target college students, because they know that college students are notoriously poor and unrealistic. If these companies can “help” college students to spend money that they don’t yet have, they can be assured of monthly payments, and better yet, they can freely raise APR rates when those payments don’t come in on time.

These companies can also train young people to live by a debt mentality, so that even if they can get out of debt at certain phases of life, they will inevitably fall back into debt when the lure of certain items becomes too much for them. If you train people to buy more than they can afford — or to live by “soft,” unrealistic numbers instead of limited resources — you can keep them in a continual position of dependency.

Ideally, before you make a credit card purchase, consider the emotional and economical costs of the purchase. Ask yourself how you will feel after you purchase the item, after you bring it home and begin to grapple with its real cost. This simple question can prevent purchases that may cause regret over the long haul.

New data published by the Council of Mortgage Lenders (CML) indicates that the number of home repossessions has fallen by 1%, from 9,100 in the first quarter of the year to 9,000 in the second quarter. However, some people in the industry have warned of an “arrears timebomb”, with disaster set to strike when rates rise in 2012.

Compared with the second quarter of 2010, the latest repossession figure represents a 7% fall. At this stage in 2010, there had been 19,500 repossessions, compared with 18,100 so far this year. The number of mortgages in arrears of 1.5% to 2.5% has increased, however.

Paul Smee, director general at CML, said that the stabilisation of mortgage repayment problems could be attributed to “stable employment and low interest rates.” He added that he felt there was no need to revise current forecasts in light of the current uncertainty in the global financial markets.

The Citizens Advice Bureau has reported that it has dealt with over 100,000 cases where people are in mortgage or secured loan arrears, and says that it has prevented 5,000 people from losing their homes in the past year. Gillian Guy, chief executive at the CAB, said: “With the cost of living going up daily and incomes lagging badly behind, mortgage lenders and the government must focus on helping people stay in their homes. Repossession is a terrifying prospect and should always be the last resort.”

If you do fall behind with your mortgage payments, you should always treat them as the top priority before paying back any other debts. Otherwise, you risk losing your home. Always contact your lender if you are expecting to miss a payment, rather than waiting for them to start threatening you with legal action. They may be willing to reduce your monthly payments in some circumstances.

Additionally, you should ensure you are receiving any benefits or tax credits to which you are entitled. The Government also operates a Mortgage Rescue scheme, through which you be able to sell your home but continue living there and paying rent. You can get more information on this from your local council.

If you are struggling to repay unsecured loans, credit cards or overdrafts, we can provide confidential debt advice.

In this economic climate, many of us are faced with debts, far greater than we’ve ever experienced. The total UK personal debt currently stands at around the £1.5bn mark. The average household debt is approximately £16,500 (excluding mortgages) and it is estimated that 346,000 loan accounts are in arrears. However, even with these grim figures, credit companies are still more than happy to offer credit to anyone, it would seem.

Most of us will recognise the situation all too well; you’re weighed down with the day’s shopping and just about to pay for your goods at the till. Just before you hand over the cash, the cashier offers you a discount on all of your purchases if you sign up for a store card. “It’ll only take a second”. How could you possibly resist such an offer?

However this offer may sound at the time, you should always be wary; unless you are extremely careful with your money, store cards can come back and sting you in the future. In the UK, store cards have an APR of anything up to a staggering 30%. Many store cards offer an interest free period, usually between 30-55 days. In this time you should aim to clear your balance and reap the full benefit of the discount you made when signing up. If there is a balance on your card after this period, be prepared for the interest to stack up.

With credit being offered left, right and centre, it is easy for debt to spiral out of control. What is being sold as a ‘convenience’ could actually end up putting you firmly in the red. If you do take a store card, or any other credit card for that matter, make it your priority to make payments on time to avoid substantial late payment charges. Also, refrain from making the minimum payments. Pay as much as you can each month to clear the balance as quickly as possible.

At the end of April 2011, personal debt in the UK amounted to £1,452 billion – the current sum total of personal debt is almost equal to the country’s entire GDP for 2010.

The average household debt stands at £55,854 (or £8,121 if mortgages are excluded) – a property is repossessed every 14 minutes in the UK and landlord possession orders are made 265 times a day. £179 million is paid in interest every 24 hours, and an individual is declared bankrupt or insolvent every 4.36 minutes.

The total amount of lending in April 2011 increased by £1.2 billion (there was a £700 million increase in secured lending and a £500 million increase in consumer credit lending). At the end of April, total secured lending had reached £1,241 billion and total consumer credit stood at £211 billion.

In the past year, £9.5 billion of loans were written off by UK banks and building societies, which is equivalent to £20.71 million every day, and the Citizens Advice Bureau deals with nearly 10,000 people struggling with debt problems daily.

Redundancy is fuelling increasing levels of debt, with 1,384 people made redundant every day and 850,000 unemployed for 12 months or more.