How to get help with debt

Who can help with debt?

Several organisations can help you with debt problems. These groups understand what you're going through and want to help you find a solution.

• Free debt advice services are your best starting point. These include StepChange, Citizens Advice and National Debtline. They offer free, confidential advice and you can call them, chat online, or visit their offices.
• Your local council can help with specific debts like Council Tax or housing benefit payments. They also often have welfare rights officers who can check if you're claiming all the benefits you're entitled to.
• Your bank or lender might be more helpful than you think. If you're struggling to make payments, contact them early. They should try to work with you to find a solution.

How to get help with loan debt

Loan debt includes loans, store cards, and hire purchase agreements. When you can't keep up with loan payments, don't panic. There are several ways to get help.

• Contact your lenders immediately once you realise you're struggling. Explain your situation honestly. Many lenders will freeze interest, reduce payments, or give you a payment holiday. They have to treat you fairly if you're in financial difficulty.
• Debt consolidation loans can help some people manage their debts better. This means taking out one new loan to pay off all your other debts. You'll then have just one monthly payment instead of several.
• Debt management plans are another option. A debt charity helps you work out what you can afford to pay each month. They then contact your lenders to arrange reduced payments. This isn't legally binding, but often lenders will agree to it.
• Individual Voluntary Arrangements (IVAs) are formal agreements between you and your creditors. You agree to pay back what you can afford over five or six years. After this time, any remaining debt is written off. You'll need to use a licensed insolvency practitioner to set this up.

How to get help with tax debt

Tax debt includes unpaid income tax, National Insurance, VAT, or tax credit overpayments. HM Revenue and Customs (HMRC) has powers to collect these debts, but they also offer help if you're struggling.

• Contact HMRC's Payment Support Service if you can't pay your tax bill. They can set up payment plans that spread your debt over several months or years. The sooner you contact them, the more likely they are to help.
• Be honest about your financial situation. HMRC will ask about your income, expenses, and other debts. They use this information to work out what you can afford to pay. If you're completely unable to pay, they might suspend collection action.
• Get professional help if your tax affairs are complicated. Tax advisers or accountants can help you understand what you owe and negotiate with HMRC. Some debt charities also have specialists who can help with tax problems.
• Don't ignore HMRC letters or phone calls. If you don't respond, they can take enforcement action, including taking money from your wages or bank account.

Can I write off debt?

It is possible to write off some debts, meaning you wouldn’t have to pay them back. Although this sounds appealing, it can have serious consequences for your credit file. For this reason, it’s important to weigh up the advantages and disadvantages carefully before making any decisions.

What is a Debt Relief Order?

A Debt Relief Order (DRO) is like a simplified version of bankruptcy. It's designed for people with low incomes and few assets who can't pay their debts.

• You might qualify for a DRO if you owe less than £50,000, have less than £75 monthly income after essential expenses, and own assets worth less than £2,000. You also can't own a car worth more than £4,000.
• A DRO lasts for one year. During this time, your creditors can't chase you for payment or take you to court. If your situation doesn't improve after a year, your debts are written off completely.
• The process is free. You'll need to apply through an approved intermediary, usually a debt advice charity. They'll help you complete the application and check that a DRO is right for you.
• There are restrictions during the DRO period. You can't borrow more than £500 without telling the lender about your DRO. You also can't act as a company director or set up a business without permission.

Government schemes to clear debt

The government provides several schemes to help people struggling with debt. These are designed to give you breathing space and help you get back on your feet.

• Breathing Space gives you 60 days' protection from creditor action. During this time, interest and charges freeze, and creditors can't contact you or take enforcement action. You can apply through a debt adviser, and it's free.
• Mental health crisis moratorium offers longer protection if you're receiving mental health treatment. This lasts as long as your treatment continues, plus 30 days. A mental health professional must confirm you're receiving treatment.
• Help to Save is a government savings scheme for people on low incomes. While it doesn't clear existing debt, it helps you build savings. The government adds a bonus to your savings, which can help you avoid debt in the future.
• Budgeting loans are available if you receive certain benefits. These interest-free loans can help you pay for essential items like furniture or clothing. You repay them through deductions from your benefits.

Organisations that help with debt

If you're struggling with debt, help is out there. These organisations understand that debt problems affect your whole life, not just your finances.

• StepChange is the UK's leading debt charity. They offer free debt advice online, by phone, and through webchat. They can help you create a budget, negotiate with creditors, and set up debt management plans.
• Citizens Advice provides free, independent advice on debt and many other issues. They have offices across the UK and offer help online, by phone, and face-to-face. They can also help with benefits, housing, and employment issues.
• National Debtline offers free debt advice by phone and online. They have a comprehensive website with fact sheets and sample letters. They also provide specialist advice for specific situations like redundancy or relationship breakdown.
• Turn2us helps people access welfare benefits and grants. They have an online benefits calculator and grants search tool. They can help you increase your income, which makes it easier to deal with debt.
• Money Wellness is one of the largest providers of debt advice in the UK. They can help with budgeting guidance, benefits assessments, income maximisation and vulnerability support.

Remember, you don't have to struggle with debt alone. Help is available, and taking the first step to get advice is often the hardest part.

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