Dealing With Debt: A Practical Starting Guide
Debt problems affect millions of people in the UK. The most important first step is to get free advice, not to make minimum payments and hope things improve. Properly managed, most debt situations have a solution. This guide explains where to start, how to prioritise debts, and what options are available to you.
Get instant help right now
A Citizens Advice appointment can take weeks. Our free assistant is available 24/7 with no appointment, giving you clear, step-by-step answers about your exact situation, what to do next, and the deadlines that matter.
Need to take action? It can draft a ready-to-send formal letter for you (optional, from £4.99).
England, Scotland, Wales & Northern Ireland.
Priority vs non-priority debts
Not all debts are equal. Some have more serious consequences if you don't pay them. Always deal with priority debts first:
- Rent or mortgage arrears (risk of eviction)
- Council tax (bailiffs and prison risk)
- Gas and electricity (disconnection)
- TV licence (criminal prosecution)
- Magistrates court fines
- Child maintenance
- Income tax / HMRC debts
- Credit cards
- Overdrafts
- Personal loans
- Store cards
- Payday loans
- Money owed to friends/family
- NHS charges
Get free debt advice first
Before speaking to creditors or agreeing to any payment plan, get free advice from one of these trusted services:
- ✓StepChange Debt Charity, stepchange.org or 0800 138 1111 (free, confidential, largest debt charity)
- ✓Citizens Advice, citizensadvice.org.uk or 0800 144 8848
- ✓National Debtline, nationaldebtline.org or 0808 808 4000
- ✓Money Advice Service, moneyhelper.org.uk
- ✓Christians Against Poverty, capuk.org (face-to-face support)
Key debt solutions explained
An informal arrangement where you make reduced payments to creditors through a charity or debt management company. No legal status. Interest may continue.
A formal insolvency solution. You pay what you can afford over 5 to 6 years and the rest is written off. Requires approval from creditors holding 75%+ of your debt. Insolvency practitioner required.
For when debts are unmanageable and you have few assets. Most debts are written off. Restrictions apply for 12 months. Not suitable for everyone. See our full Bankruptcy guide.
For those with low income, few assets, and debts under £50,000. A 12-month moratorium on debt followed by write-off. Administered by authorised advisers, you cannot apply directly.
60 days of legal protection from creditor action, interest, and charges. Gives you time to seek advice and set up a debt solution. See our full Breathing Space guide.
Scotland's equivalent of a DMP, but with legal protection. All interest and charges freeze. See our DAS guide.
Your rights when dealing with creditors
- ✓Creditors must follow the FCA's rules on treating customers fairly, including those in financial difficulty
- ✓You can request a breathing space period from creditors while you seek advice
- ✓Creditors cannot harass you or contact you at unreasonable times
- ✓If you have a mental health condition, you may be eligible for extra protections under the Mental Health breathing space
- ✓You can ask creditors to freeze interest and charges, many will agree if you show you're seeking help
- ✓A creditor cannot take your goods without a court order (except for specific debts like council tax, where bailiffs may have different powers)
First steps to take right now
Get instant help right now
A Citizens Advice appointment can take weeks. Our free assistant is available 24/7 with no appointment, giving you clear, step-by-step answers about your exact situation, what to do next, and the deadlines that matter.
Need to take action? It can draft a ready-to-send formal letter for you (optional, from £4.99).
England, Scotland, Wales & Northern Ireland.
Frequently asked questions
What is a priority debt?
Priority debts are those where the consequences of not paying are most serious, including eviction, disconnection, or imprisonment. They include: mortgage or rent arrears, council tax, gas and electricity, court fines, TV licence, child maintenance, and income tax. These should always be addressed before credit cards, loans, or overdrafts.
Can I go to prison for debt?
Not for most debts. You cannot be imprisoned for failing to pay credit cards, loans, or utility bills. However, you can face committal proceedings for council tax arrears and court fines if a court determines you have deliberately refused to pay despite having the means. This is rare but serious, get advice immediately if you receive a summons.
What free debt help is available in the UK?
StepChange, Citizens Advice, National Debtline, and Christians Against Poverty all offer free debt advice. They can review your income and outgoings, prioritise your debts, negotiate with creditors, and recommend the right formal debt solution for your circumstances. Never pay for debt advice, free services offer the same quality of help.
What is an Individual Voluntary Arrangement (IVA)?
An IVA is a formal agreement between you and your creditors to repay what you can afford over typically 5 to 6 years. After the IVA is completed, the remaining debt is written off. At least 75% of creditors by value must agree. IVAs are administered by insolvency practitioners, be wary of companies charging large upfront fees.
Can creditors take money from my wages or benefits?
Creditors with a county court judgment can apply to the court for an attachment of earnings order, which takes money directly from your wages. Benefits and Universal Credit are generally protected from creditor action, though council tax and some other priority debts can result in deductions at source from your Universal Credit.
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