If you’re feeling the pressure of mounting debts, remember that no debt problem is unsolvable. It may not be easy or quick to fix, but there is always a route forward. The key is taking action sooner rather than later. Below are steps to help you understand your options, figure out the seriousness of your situation, and choose the right path toward becoming debt-free.
1. Evaluate your debt
Debt is when your outgoings surpass your income. This can happen gradually — a few overspends on your credit card or dipping into your overdraft too often. Over time, it can feel like you’re losing control.
You may be in a serious debt crisis if:
- a) You struggle to pay essential bills such as rent, mortgage, credit card bills, or energy charges, or;
- b) Your total debts (excluding mortgage) are bigger than your annual take-home pay.
If either of these applies to you, don’t panic. While certain remedies (like bankruptcy) can sound alarming, they’re not always necessary. There are many free and reputable organisations that can support you if you’re in crisis.
If you’re not yet in crisis but you’re consistently spending more than you earn—perhaps you keep adding to your credit card balance each month — you might be caught in a debt spiral. This often leads to even more borrowing to cover shortfalls, creating a cycle that’s hard to break.
The good news: if you tackle a debt spiral early, you may be able to fix it without needing formal debt solutions.
2. Work out your budget
No matter the severity of your debt, a clear budget is your foundation. Start by listing all your monthly income (like wages, benefits, or side hustle earnings) and then every single outgo—rent/mortgage, utilities, groceries, transport costs, and so on. Our budget guide walks you through a step-by-step process.
Once you have a budget:
Check for “easy wins.” These are areas where you can save money without radically changing your lifestyle—cancelling unused subscriptions, switching to cheaper providers for insurance, or applying for any benefits you’re entitled to. Look for additional resources. Depending on your circumstances, you might be eligible for grants, Council Tax reductions, or interest-free loans from government support schemes. Even small new savings can help you direct more money toward paying down debts.
3. Tackle the cost of your debt
If you’ve balanced your budget but still have outstanding balances, try to minimise the interest you’re paying. High rates can trap you in debt for years.
| Strategy | Best for | Considerations |
|---|---|---|
| Balance transfers | Credit card debt | Look for 0% interest deals, but watch for transfer fees |
| Debt consolidation | Multiple high-interest debts | Simplifies payments, but ensure the new rate is lower |
| Using savings | Any debt with interest higher than savings earn | Keep a small emergency fund even while paying off debt |
Consider transferring high-rate credit card balances to a lower or 0% interest deal, if your credit score allows. Look into remortgaging if you’re a homeowner and can secure a better rate, but be mindful of any early repayment fees. Use savings to pay off debts if you have money stashed away but face high interest rates. Paying off a debt at 20% APR will almost certainly save you more money than keeping it in a low-interest savings account.
4. Know when to make bigger changes
If you’ve done all the “quick fixes” (switching providers, cutting down on unnecessary expenses), yet you still spend more than you earn, it’s time to consider more significant adjustments.
These “painful savings” can mean scaling back your lifestyle—for example, selling a car you rarely use, moving to a cheaper property, or cancelling non-essential memberships. In tough times, even modest cutbacks (like switching to cheaper food brands or skipping certain luxuries) can free up money to throw at your debts.
5. When to seek one-to-one help
Sometimes, no amount of budgeting or cost-cutting feels enough. If you can’t pay at least your minimum bills each month or you’re falling into arrears, it’s best to get tailored, professional advice sooner rather than later. In the UK, debt charities and non-profit agencies exist to give you free, confidential support:
StepChange Debt Charity – Offers phone and online advice to create a clear plan based on your circumstances.
National Debtline – Provides guidance over the phone or via webchat, plus helpful online tools.
Citizens Advice – Has trained advisers who can help with debt issues as well as other legal and financial concerns.
Christians Against Poverty – Specialises in in-person support, particularly for those struggling emotionally as well as financially. They support people from all faiths and none.
These organisations can suggest formal options like debt management plans or even insolvency procedures if needed. Their goal is to recommend the best path for you, not to sell you a product. They can also give you access to “breathing space,” where interest and charges may be paused while you organise a repayment plan.
6. Keep the momentum going
Debt isn’t always cleared quickly. It can take months or years, depending on your income, interest rates, and personal situation. Still, every payment you make chips away at the problem.
| Debt repayment method | How it works | Best for |
|---|---|---|
| Snowball method | Pay off smallest debts first | Those who need quick wins for motivation |
| Avalanche method | Pay off highest interest debts first | Those who want to minimise total interest paid |
| Debt management plan | Structured payment plan through a debt charity | Those struggling to manage multiple payments |
Regularly review your budget. As life changes—maybe you get a salary increase or your utility bills go up—your plan should adapt.
Celebrate milestones. Paying off even one small debt can be a morale booster. Look for support. Online communities share tips and encouragement to help you stay committed.