Debt when going to prison: planning and support

Prison does not automatically cancel debt. Arrange communication, protect essential bills and get advice on benefits and court papers.

I Might be Going to Prison, and I have Debt. What will happen to it?

Debt does not automatically disappear on imprisonment. Creditors may still bring claims or take permitted recovery action, but you do not lose the right to respond, dispute liability or obtain advice merely because you are in prison. Arrange a reliable way to receive documents and act on deadlines.

Ask about benefits, housing and household liabilities before custody where possible. Some benefits stop or are suspended, while limited housing support or a partner’s separate entitlement may remain. Council-tax discounts or exemptions can depend on the circumstances. See GOV.UK’s benefits-and-prison guidance.

Relatives do not automatically become responsible for your sole debts. Joint liabilities, guarantees and housing arrears need separate advice. Eviction, energy enforcement and bankruptcy each require the relevant legal process; they are not automatic consequences of being in prison.

» TAKE ACTION NOW: Fill out the short debt form

I’m About to be Sent to Jail with Debt. What Steps Should I Take? 

If you have a court hearing and feel that you will be sent to jail after it, I highly recommend that you address debts while you’re inside so you don’t come out to a whole host of debt implications. 

Firstly, you should spend some time contacting creditors and inform them of your situation.

Tell them when you’ll be going to jail and approximately for how long (if you have an idea). Creditor communication is vital.

You can also ask them if you could appoint a person (such as a trusted friend or family member) to handle your account while inside. It would be quite convenient for you to do this, as dealing with your creditors while in jail could be very difficult.

Depending on your creditor, you may be allowed to appoint a person over the phone to handle debts, but other companies may require you to do this in writing so that they have some sort of proof. 

As you can see from below, many creditors will work with you or your family, but some will make it more difficult. This is where professional advice can be helpful.

If you cannot contact your creditors before going inside, you can try to contact them once you’re in jail.

Your access to a phone will be limited, so it might be a good idea to ask a friend or family member to do this for you. If you owe money, your income will likely not be enough to pay your debts.

Thus, you might need to ask creditors for a payment break to help you manage debts.

You can even take steps when you’re inside to take care of your debts, for example, by going bankrupt. However, this could be difficult to arrange and might not be the best option for you either.

What is a Payment Break?

A payment break is an agreed temporary change, not an automatic entitlement on imprisonment. Ask the creditor to confirm payments, duration, interest, charges and credit reporting in writing. A reduced-payment arrangement can affect the credit record, but it is not correct to assume every agreed break creates the same arrears entry or always increases the total debt.

For regulated credit, firms must consider appropriate forbearance. Get free advice if no payment is affordable and do not agree to payments that take money needed for essential household costs.

Can You Go to Prison for Debt in the UK?

Ordinary inability to repay a consumer loan, credit card or similar civil debt does not itself lead to imprisonment. Ignoring certain court orders can create separate consequences.

Criminal fines, child-maintenance enforcement and council tax can involve different powers and safeguards. In England, council-tax committal is a last resort requiring a means inquiry and wilful refusal or culpable neglect; Wales has abolished it. Do not apply one UK-wide checklist to every debt. Obtain urgent advice about a summons or threatened committal.

Take the first step towards tackling your debt

Every day, our partner, The Debt Advice Service, helps people understand their options for dealing with debt. Their debt advice is free, with no obligation to proceed.

MoneyNerd introduces you to The Debt Advice Service. We do not provide debt advice or recommend debt solutions.

Natasha

Very helpful and informative thank you

Get started

If you submit the enquiry form, MoneyNerd will share your details with The Debt Advice Service so they can contact you.

Some debt solutions have fees and may negatively affect your credit rating. MoneyNerd may receive a fee if you go ahead with a debt solution through The Debt Advice Service.

The Debt Advice Service is a trading style of Pacific Financial Solutions Limited.

For free, impartial help and access to not-for-profit debt advice, visit MoneyHelper.

Dealing with debts when you leave prison

Once you have left prison, you must get your finances back on track.

Depending on your age and circumstances, you may be entitled to Universal Credit, which will cover some living costs and housing expenses. If you cannot work due to poor health, you may be able to claim disability benefits.

Get professional advice to see what financial support you are entitled to.

Regarding your debts, if you haven’t made arrangements or contacted your creditors, now may be the time to do so.

If the debt has become unmanageable, solutions such as an IVA, debt relief order or debt management plan are available. These do have a credit file impact though.

Resources and assistance available for those in prison with debt

Debt charities and organisations, such as the ones I have listed below, are great places for free and impartial debt advice if you or a loved one are facing prison.

Talking to someone about it can be a huge relief and take pressure off at an already stressful time.

Most prisons also have a benefits or financial advisor you can speak to, as well as prison suppor services.

References

1. Citizens Advice – The state of debt collection