01 October 2019

4 min read


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A guide to managing your debts

If your debts are keeping you awake at night or you’re struggling to keep up with the repayments, there are steps you can take and organisations that can help you.

Other signs that it’s time to do something about your debts include borrowing to meet the repayments on a loan or credit card; only making the minimum payment on your credit card each month; taking on new borrowing to pay off old debts; falling behind with payments on loans; using money earmarked for essentials, such as food or your annual tax bill, to pay off debts.

You can navigate through the guide using the table of contents, or if you'd like to read the guide end-to-end in full, you can download the PDF.

Did you know?

You can get independent, free advice over the phone and online from charities that have debt experts.

Dealing with debts

If you haven’t yet fallen behind on payments.

If you’re having difficulty paying your bills or keeping up with loan repayments, check if you have any other resources which you can use. This could be savings or money from an emergency fund. Another option could be to borrow from relatives to help tide you over or to ask for a loan from your employer if you’re still working. If you do this make sure you’re clear about when you can repay this money to avoid a falling out.

If you’re unable to come up with the cash, speak to the organisation you owe money to. You may be able to come up with some arrangement with them to reduce or take a holiday from your repayments until your finances improve.

Your lender will probably want proof you are genuinely having difficulty repaying them rather than just spending your money elsewhere. A good way to show this is to draw up a budget of all your monthly outgoings. You can then use this to work out how much you can afford to pay your creditors each month as well as using it to negotiate with them.

If you’ve started to fall behind on payments.

Now is the time to get some expert help and advice. You can get independent, free advice over the phone and online from charities that have debt experts. Before contacting one of these organisations pull together the following:

  • all the information you have about your debts including how much you owe, any arrears and any letters threatening enforcement action
  • details of all your income
  • details of all your expenditure (this includes all your bills and your household spending).
Pinboard with advice on prioritising your debts

Did you know?

While it’s tempting to pay off your largest or most expensive bills first, these are not always the most urgent ones.

Prioritising your debts

If you owe money to more than one organisation it’s a good idea to prioritise your debts. While it’s tempting to pay off your largest or most expensive bills first, these are not always the most urgent ones.

Debts fall into two categories: priority and non-priority debts. It’s important to deal with your priority debts first as the consequences of not doing so can be serious. For example, if you don’t pay your rent you could lose your home and if don’t pay your Council Tax you could end up in prison.

Priority debts include:

  • your rent, mortgage and any loans secured against your home
  • Council Tax
  • gas and electricity bills
  • child maintenance
  • TV licence
  • Income Tax, National Insurance and VAT bills
  • court fines

Once you’ve dealt with your priority debts you should then look at your non-priority bills. These are bills where the consequences of not paying them are less serious than with priority debts. But this does not mean you should ignore them as the organisations you owe money to could eventually take you to court or send in the bailiffs to collect the money from you.


Non-priority debts include:

  • credit or store cards bills
  • hire purchase debts
  • loans which are not secured against your home
  • bank overdrafts
  • payday loans
  • mail order catalogue bills

To make sure you don’t fall behind with these bills you need to make the minimum payments due on them. If you then find you have some spare cash use this to pay off more of your most expensive debt. This will be the one which charges the most interest. Don’t forget to check there are no penalties for making overpayments. Once you’ve cleared this debt then concentrate any overpayments on your next most expensive debt.

The quicker you can pay off these debts the less interest you’ll end up paying and the sooner you’ll be out of debt.

Where to get help

There are several free debt advice agencies which can help you listed below. Unlike debt management companies these organisations do not charge for their services leaving you with more money to pay off your debts.

If you are self-employed or own a small business you can get free debt advice at:

Or in Northern Ireland: