Debt is one of those problems that feels bigger the longer you leave it — and the bigger it feels, the harder it is to face. That cycle is real, and it traps a lot of people. This guide is about breaking it: understanding what you're dealing with, knowing what to prioritise, and taking the practical steps that actually move things forward.
It doesn't matter how the debt happened. What matters is what you do next. The good news is that there's more free help available in the UK than most people realise, and the solutions are often more manageable than the anxiety suggests.
Priority Debts vs Non-Priority Debts
Not all debts are equal. The consequences of non-payment vary enormously, and understanding which debts carry the most serious consequences is the first step to managing the situation effectively.
Priority debts are debts where non-payment can lead to losing your home, losing essential services, or criminal prosecution. These must be dealt with first, regardless of which creditor is shouting loudest.
- Rent or mortgage arrears — falling behind risks eviction or repossession
- Council tax — councils have strong enforcement powers including bailiffs and, in extreme cases, committal to prison
- Energy bills — suppliers can install prepayment meters and, in rare cases, disconnect supply
- Court fines and child maintenance — non-payment can lead to further court action
- TV Licence — if you watch live TV, non-payment is a criminal offence
- Income tax and VAT — HMRC has extensive enforcement powers
Non-priority debts are debts where the consequences are serious but slower to escalate:
- Credit cards and store cards
- Personal loans and overdrafts
- Buy now, pay later debts
- Catalogue debts
- Money owed to family and friends
The creditor who contacts you most aggressively isn't necessarily the one you should pay first. A credit card company sending daily letters is less urgent than council tax arrears where bailiff action is pending. Prioritise by consequence, not by volume of contact.
What to Do First
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Stop the situation getting worse
If you're borrowing to pay existing debts — using one credit card to pay another, or taking payday loans to cover bills — stop. This makes the total debt grow faster and the situation harder to resolve. It feels like it's helping in the short term, but it's making the problem bigger.
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Work out exactly what you owe
Write down every debt: who you owe, how much, the interest rate, and whether it's priority or non-priority. Check your credit file for debts you might have forgotten — you can check for free at CheckMyFile, Experian, Equifax or TransUnion. Having the full picture is essential before making any decisions.
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Work out your income and essential spending
A financial statement — a simple list of your monthly income and outgoings — is the foundation of any debt solution. Our financial statement guide walks through how to create one. Debt advisers will ask for this information, so having it ready saves time.
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Contact a free debt advice service
This is the most important step. A debt adviser looks at the full picture — your income, your debts, your circumstances — and identifies which solution fits your situation. The advice is free, confidential, and non-judgemental.
Free Debt Advice Services
There are several organisations in the UK that provide free, professional debt advice. They are staffed by trained advisers and regulated by the Financial Conduct Authority. Never pay for debt advice — everything these services offer is available at no cost.
StepChange — the UK's largest debt charity. Offers full debt advice, debt management plans, and help accessing formal debt solutions. Available online and by phone (0800 138 1111). Their online debt advice tool walks you through a full assessment and recommends a solution.
Citizens Advice — provides advice on debt, benefits, housing, and employment. Available online, by phone (0800 144 8848 in England), and in person at local offices. Particularly useful if your debt problem overlaps with benefits, housing, or employment issues.
National Debtline — free debt advice by phone (0808 808 4000) and online, including sample letters for dealing with creditors and detailed fact sheets on specific debt types.
MoneyHelper — government-backed service providing impartial money guidance, including a debt advice locator tool.
You don't need to have a crisis-level problem to contact these services. They help people at every stage — from early worries about debt to situations involving bailiffs and court orders. The earlier you get in touch, the more options are available.
Breathing Space
The Debt Respite Scheme — commonly called Breathing Space — is a government scheme that gives legal protection from creditor action while you get debt advice and find a solution.
Standard Breathing Space lasts 60 days. During this period:
- Most creditors must stop all enforcement action
- Interest, fees and charges on most debts are frozen
- Creditors cannot contact you to ask for payment (they can still send statements)
Mental Health Crisis Breathing Space is available if you're receiving mental health crisis treatment. It lasts as long as the treatment continues, plus 30 days. The protections are the same but the duration is longer.
You cannot apply for Breathing Space directly — it must be accessed through a debt adviser at an FCA-authorised organisation. Contact StepChange or Citizens Advice and ask about it. There's no cost involved.
Formal Debt Solutions
Depending on your circumstances, a debt adviser may recommend one of several formal solutions. Each has different implications, eligibility criteria, and effects on your credit file. A debt adviser will explain the options fully before you commit to anything.
Debt Management Plan (DMP) — an informal arrangement where you make a single reduced monthly payment to a DMP provider, who distributes it to your creditors. Not legally binding, but most creditors accept them. Debts are repaid in full over a longer period. No upfront cost through charity providers like StepChange.
Debt Relief Order (DRO) — available if you owe less than £30,000, have minimal assets, and a low disposable income (typically less than £75/month after essential costs). Debts are written off after 12 months. There's a fee of £90, which can sometimes be waived. Appears on your credit file for six years.
Individual Voluntary Arrangement (IVA) — a formal, legally binding agreement to pay back a proportion of your debts over a fixed period (usually five or six years). Requires agreement from creditors holding at least 75% of the total debt. The remainder is written off at the end. Appears on your credit file. Requires a licensed insolvency practitioner to set up.
Bankruptcy — a formal legal process where your debts are written off, but you may lose assets including your home. Costs £680 to apply online. Lasts 12 months, with restrictions on borrowing during that period. Appropriate in specific circumstances, usually where debts are large and there's no realistic prospect of repaying them.
Never agree to a debt solution without getting independent advice first. Some commercial debt management companies charge fees that free services don't. Always use a charity or FCA-authorised adviser.
Dealing With Creditors
If creditors are contacting you regularly, it can be overwhelming. A few things to know:
You have rights. Creditors must treat you fairly. Under FCA rules, they must consider your circumstances and not put unreasonable pressure on you. If you've told them you're seeking debt advice, they should give you time to do so.
Respond, even briefly. Ignoring creditor letters makes the situation escalate faster. A short response explaining that you're seeking debt advice and will be in touch is usually enough to pause further action temporarily. National Debtline has template letters you can use.
Keep records. Note the date, time, and content of any calls or letters from creditors. If a creditor is behaving unfairly — calling at unsocial hours, contacting you at work, being threatening — report them to the Financial Ombudsman Service.
Bailiffs are not the same as debt collectors. Debt collectors have no special powers — they can ask for payment but cannot enter your home or seize goods. Bailiffs (enforcement agents) do have legal powers, but these are limited and regulated. Citizens Advice has detailed guidance on your rights when dealing with bailiffs.
If Income Doesn't Cover the Basics
If your income — whether from employment, benefits, or both — doesn't cover essential living costs before you even think about debt repayment, the problem isn't just debt. It's an income gap, and different help is needed.
Our guide on when there's not enough covers emergency food help, crisis funds, council support, and other practical help available in the UK. If you're on benefits, a benefits check at Turn2us may identify entitlements you're missing — billions of pounds in benefits go unclaimed every year.
A debt adviser can also help you check whether your income could be higher. They see the full picture and often identify benefits, grants, or cost reductions that the person hadn't considered.
Frequently Asked Questions
Priority debts carry the most serious consequences for non-payment — losing your home, having your energy cut off, or bailiff action. These include rent/mortgage arrears, council tax, energy bills, and court fines. Non-priority debts like credit cards and personal loans have serious consequences too, but they escalate more slowly.
No. Seeking debt advice has no effect on your credit score. Entering a formal debt solution like an IVA or DRO will appear on your credit file, but your adviser will explain this fully before you agree to anything.
Breathing Space (the Debt Respite Scheme) gives you 60 days of legal protection from creditor action — no enforcement, no contact, no interest or charges on most debts. You access it through a debt adviser at an FCA-authorised organisation like StepChange or Citizens Advice. You cannot apply directly.
For most consumer debts (credit cards, loans, overdrafts), no. The exceptions are council tax (where wilful refusal to pay can theoretically lead to committal), TV licence evasion, and criminal fines. In practice, prison for council tax is extremely rare and happens only in cases of deliberate refusal rather than inability to pay.
Yes. Debt advisers help with debts of any size. A small debt that you cannot manage can escalate quickly through charges, interest, and enforcement costs. Getting advice early is always better than waiting.
Ignoring debts doesn't make them go away. Creditors will escalate through letters, phone calls, default notices, court claims, and potentially bailiff action. Interest and charges continue to build. The earlier you engage — even if you can only pay a small amount — the more options are available.
General information only. Not financial or legal advice. For free, independent debt advice contact StepChange (0800 138 1111), Citizens Advice, or National Debtline (0808 808 4000).