Debt Information: Understanding Your Options

If you are struggling with debt, this guide explains common types of debt, collection and enforcement, and where to find support. MoneyNerd provides general information and can introduce you to The Debt Advice Service for free debt advice. We do not provide debt advice or recommend debt solutions.

In this guide, we’ll:

•  Talk about ways to reduce your debt.
•  Explain who debt collectors are and what they do.
•  Discuss how debt charities can provide help.
•  Tell you about plans that can help you get out of debt.
•  Explain when debt write-off may be available and its limitations.

The right option depends on your debts, income, essential spending, assets and where you live. A free debt adviser can help you understand the costs, risks and eligibility requirements.

Reducing your debt

Ways to deal with debt depend on affordability, essential costs, priority commitments and the type of borrowing. Our guide to reducing debt explains general approaches; it does not determine which is suitable for you.

Compare the costs, limitations and risks of any repayment approach. If contractual payments are unaffordable, get free debt advice before deciding what to pay or taking new borrowing.

How to clear your debts

On our How to Clear Your Debts page, we take a look at some of the most tried-and-tested methods to clear debts in the UK. From debt mitigation strategies and informal debt solutions to legally binding debt solutions, all bases are covered in this informative guide.

Anyone with debts they want to escape needs to take control and brush up on their options today. 

What are debt collectors?

What really are debt collectors and what rights do they have when chasing you for payment? Our debt collector page was written to answer these important questions and armour debtors with their legal rights. Fight back against rogue debt collectors with our free information. 

How can debt charities help?

For most debtors, speaking with a UK debt charity should be their first point of call to escape their debts. Debt charities offer free personalised advice and can even help set up debt solutions and negotiate with creditors. Learn more about debt charity services and uncover the best debt charities now on our debt charity page. 

What are get-out-of-debt plans?

A get-out-of-debt plan can be any plan you use to reduce and eventually clear your debt. Some of these plans use strategies and informal solutions that can be set up between creditors directly or just need to be implemented yourself. Others require the help of specialists to make the debt solution legally binding. 

Read general information about repayment approaches at our debt-planning guide. A debt adviser can assess your circumstances and explain which options may be suitable.

What are Debt Management Companies?

Some commercial debt management providers charge fees to arrange and run a Debt Management Plan. These fees reduce the money reaching creditors and can extend repayment. Fee-free DMPs and free debt advice are available. Use MoneyHelper’s debt advice locator to find support.

How to write off debt

Some formal debt solutions can write off included qualifying debts if their conditions are met. A Debt Relief Order does not cover every debt, and eligibility depends on your circumstances and jurisdiction. Debt write-off is not a loophole or a guaranteed outcome. Read our guide to debt write-off and seek free debt advice before choosing an option.

Useful letter templates

There are many times when you may need to write a formal letter to creditors, debt collectors, bailiffs or someone else in the debt industry. MoneyNerd is helping debtors to communicate professionally and save time with a series of useful letter templates. We have free letter templates for you to download and use in an array of situations. Check them out now! 

How to help someone get out of debt

If you’re not in debt but someone you love and care about is struggling with debt, we can help you help them. Our How to Help Someone Get out of Debt page is full of useful info for people trying to help a friend or family member escape their money worries. We’ve discussed what support is available, where to find it, and how to approach sensitive subjects. 

What is the free government debt scheme?

There is no universal government scheme that clears everyone’s debts. Statutory options have specific eligibility rules. In England and Wales, Breathing Space can temporarily protect eligible people from most creditor enforcement, interest and charges on qualifying debts while they get advice. It does not write off debts or act as a payment holiday. Find out more on our government debt help page.

Dealing with Bailiffs

In England and Wales, enforcement agents, often called bailiffs, can collect certain debts when they have the necessary legal authority. This commonly follows a court judgment, order or warrant, but some debts, including certain HMRC debts, can be enforced without a prior court order. Bailiffs have different powers from ordinary debt collectors. Scotland and Northern Ireland have different enforcement systems. Read our bailiff guide for more information.

Attachment of Earnings

If a debt isn’t repaid after the debtor is told to pay with a court order, the claimant can escalate debt enforcement with an Attachment of Earnings. An Attachment of Earnings forces the debtor’s employer to send some of their wages to the court, which is then given to the claimant. If your creditor is applying for an Attachment of Earnings or you just want more info, head to our Attachment of Earnings guide. 

Statute-barred debt

A debt may become statute-barred when the creditor has run out of time to take certain legal action to recover it. In England and Wales, this does not automatically cancel the debt. In Scotland, a debt can cease to exist when the applicable prescription period expires. The rules depend on the debt, its history and the relevant jurisdiction. Get free debt advice before assuming an old debt is unenforceable, and do not ignore court papers. National Debtline explains the rules for England and Wales.

Catalogue debt

Catalogue credit spreads the cost of purchases over time, but interest and fees can increase the total paid and instalments must fit your budget. Missing payments can create arrears and harm your credit record. Read our catalogue-debt guide if you are struggling with repayments.

Credit card debt

If you use a credit card you will have a credit card debt equal to the amount you have spent plus any interest or fees. Failing to pay back the credit card debt as required will result in credit card arrears and possibly late fees. You can learn all about these debts and ways to deal with them on our credit card debt page.   

Buy-now-pay-later debt

Buy-now-pay-later credit lets you delay or spread the cost of a purchase. Interest, late fees and credit reporting depend on the product and provider, so check the agreement. Missing payments can increase what you owe and may affect your credit record. Contact the provider and seek free debt advice if repayments are becoming unaffordable.

Loan debt

You have a loan debt if you’ve taken out any type of personal or payday loan and haven’t yet paid all of the loan and interest back to the lender. If you fail to repay the loan, you’ll end up with loan arrears and could be subject to further action by the lender to recover the money. If you’re struggling with loan debts, you can find out more on our dedicated loan debt page. 

Secured debt

Secured debt is when a credit agreement includes an asset as collateral in case the credit isn’t repaid as agreed. If the secured loan doesn’t get repaid, the creditor can choose to force the sale of the asset used as security to raise funds and clear the debt. We discuss the different types of secured debts and how to deal with them if you’re struggling to repay on our secured debt hub.

Mortgage debt

A mortgage is a loan secured against property. It may be used to buy a home or, through remortgaging, to replace existing borrowing or release equity. If repayments are not maintained, your home may be repossessed. Read our mortgage debt guide if you are struggling with payments.

Council tax debt

Council tax debts are a type of debt owed to your local authority. These debts are considered priority debts, so you need to prioritise payment towards council tax before many other types of debt. If you can’t keep up with your council tax, it’s worth reading our council tax debt page for help and support. 

Energy debt

Energy debt could refer to a debt owed to an electricity or gas supplier. There are strict laws and rules in place on what energy companies can and cannot do when you have a debt with them. Find out if they can switch off your supply and other common questions by visiting our energy debt page. 

Car finance debt

Car finance debt is any type of credit you’ve taken out to help you buy a new or used vehicle, including Hire Purchase (HP) Agreements and similar agreements. We’ve rounded up the key information on car finance debt on our new car finance debt hub. Head there now if you need to know more about car financing agreements.

How to get out of car finance

If car finance payments are becoming unaffordable, contact the lender and get advice before ending the agreement. Options depend on the type of finance. Some regulated hire purchase and PCP agreements allow voluntary termination, but payment obligations and vehicle-condition requirements can still apply. MoneyHelper explains the options and costs of ending car finance early.