Free help first
- StepChange: free debt advice and debt solutions, online or by phone on 0800 138 1111.
- National Debtline: free debt advice in England, Wales and Scotland, by phone on 0808 808 4000.
- Citizens Advice: free advice in person, by phone or online.
- MoneyHelper: free, government-backed guidance, on 0800 138 7777, and a tool to find a free debt adviser near you.
A free adviser looks at your whole budget, deals with your creditors for you and tells you every option, not just one. Find more on our free money help page.
Pay priority debts first
Some debts have harsher consequences than others, so they come first, even if the amounts are smaller:
| Priority debts | What can happen if you don’t pay |
|---|---|
| Rent or mortgage | Eviction or repossession |
| Council Tax | Court action and enforcement agents (bailiffs) |
| Gas and electricity | A prepayment meter, or in rare cases being cut off |
| Court fines and child maintenance | Enforcement agents, or money taken from your pay |
| Income Tax or VAT owed to HMRC | Enforcement action |
| Hire purchase or a logbook loan on a car you need | The car can be taken back |
Credit cards, overdrafts, personal loans, buy now, pay later and catalogue debts are non-priority. They still matter, but missing them doesn’t put your home or energy at risk.
Talk to your lenders
Call or write as soon as you think you’ll miss a payment. Explain what’s changed, and offer what you can afford. Keep a note of who you spoke to and what was agreed. FCA rules say lenders must treat you fairly if you’re in financial difficulty, for example by freezing interest or accepting lower payments for a while.
The formal options
| Option | What it is | Good to know |
|---|---|---|
| Breathing Space | A legal pause: most creditors must stop interest, charges and collection for 60 days | Arranged through a debt adviser. A mental health crisis version lasts as long as your crisis treatment, plus 30 days |
| Debt management plan | One affordable monthly payment, shared between your creditors | Free through StepChange or National Debtline. It’s informal, so creditors can still add interest, though many freeze it |
| Debt Relief Order (DRO) | Writes off your debts after 12 months if you can’t pay them | Debts up to £50,000, spare income of £75 a month or less, and assets up to £2,000 (plus a car worth up to £4,000). No application fee |
| IVA | A legal agreement to repay what you can, usually over 5 to 6 years, after which the rest is written off | Set up by an insolvency practitioner. Fees come out of your payments |
| Bankruptcy | Clears most debts, usually after a year | Your assets, and sometimes your home, can be sold, and you may have to pay from your income for up to three years |
These are the options and limits in England and Wales. Some debts, such as student loans, court fines and child maintenance, usually can’t be written off.
Scotland and Northern Ireland
Scotland has its own solutions, overseen by the Accountant in Bankruptcy: the Debt Arrangement Scheme, which spreads payments with interest frozen, protected trust deeds, and bankruptcy, including the Minimal Asset Process for people with low income and few assets. An adviser can also arrange a temporary pause on creditor action.
Northern Ireland has Debt Relief Orders, IVAs and bankruptcy, with its own limits, and the Breathing Space scheme doesn’t apply. Advice NI and StepChange can help there.
Watch out
Be wary of firms that advertise “government-backed” debt write-offs, or charge fees for a debt management plan: you can get one free. Some firms are paid by the insolvency practitioners they refer you to, so they push IVAs even when a free plan or a DRO would suit you better. A free adviser will tell you every option.
What it does to your credit file
A DRO, IVA or bankruptcy stays on your credit file for six years, and a debt management plan usually shows as reduced payments on each account. That makes borrowing harder for a while, but it’s often far less damaging than years of missed payments.
Working through it yourself? See how to pay off debt.