How to get out of debt

Getting help with debt can seem like a daunting task. But the good news is, there’s loads of help out there and *it is* possible to get on top of your debt.

When should I get help with debt?

If you’re constantly worrying about your debt and find yourself struggling to make the repayments while still paying for your household bills and essentials, then it’s definitely time to start looking for help. There is help out there and the sooner you reach out, the sooner you can be on the road to paying them off.  

Even if you have a smaller amount of debt and aren’t struggling with the repayments, you still might find it useful to speak to someone because they could give you a plan to pay it off quicker so the debt costs you less in the long run. Our app, for example, is a great tool to help you get a handle on your money and see where you could be making savings.

Where can I get help with debt?

Where you go to get help with debt depends on how serious your debt is. People who are in what’s classed as ‘debt crisis’, for example, will need to take different action to those who just have large amounts of debt. So, the first step to understanding where to get help with debt is to assess your personal situation to understand if you’re classed as in debt crisis. The best way to do this is to ask yourself these questions:

  • Am I struggling to pay my basic outgoings e.g. mortgage, rent, household bills or credit card minimums?  
  • Is the total amount of my debt more than what I will earn after tax this year?

If you answer yes to either of those, then the likelihood is you are in debt crisis and we would recommend you speak to a debt counselling agency. The reason this is the advice rather than giving you a detailed plan within this article is that everyone’s situation is different, and the advice given to one person may not be suitable for another.  

The beauty of a debt counselling agency is they are able to sit down with you, one-on-one, and review your debts in detail so they can get you on a plan that is bespoke to you and your personal needs. If you’re not sure where to find a debt counselling agency, check out our list below.

If you have a lot of debt but don’t think it would be considered debt crisis, then a debt counselling agency isn’t for you. The solutions they offer are very serious measures designed for those with little other options. Instead, there are several steps you can take to start to tackle your debts which we’ve detailed below.

What can I do to get out of debt?

If you’re in debt crisis, the best thing you can do is speak to a debt counselling agency. However, if you’re not in crisis but do still have a large amount of debt you need to repay, there are many different things you can try and it’s important to explore them all to find what works for you (and then stick to it). Here are a few things you may want to try to start with:

  • Stick to a budget. This really is essential for everyone no matter the size of your debts - it’s the foundation of good money management and will ensure you are able to see where your money is going so you can make the necessary cuts. The problem with a lot of budgets though is they don’t work – when a budget is on a spreadsheet, they’re very hard to stick to and don’t naturally fit into your life - but that’s where we come in. Our app will let you connect all your different accounts so that you can always get an instant view of your money in relation to your budget, making it much easier to stick to in the long term.
  • Speak to your mortgage provider. They may be able to offer you a mortgage payment holiday or switch you to an interest only plan for a few months while you focus on paying off your more costly, unsecured debts.
  • Check if you’re entitled to any benefits. Martin Lewis has a handy benefits calculator on his website so you can check if you’re missing out on anything. It only takes 10 minutes to complete so is well worth a check.

How can I cut the costs of my debts?

To cut some of the costs associated to your debts, you need to look at ways you can repay the debts faster, while paying the lowest interest rates you can. The best way to do this is to audit all of your debts and repay the most expensive ones first (the ones with the highest interest rates). There are also a few other things you can try depending on your wider financial circumstances.

If you’re in a position where you have debts to pay off but also have some money sat in a savings account, you might want to think about using those savings to pay off a loan. The amount of interest you’ll be paying on the debt is likely to be far higher than the interest you’ll be getting paid on your savings account, so using that money to repay the loan early could save you money in interest charges over the long run and cut the total amount you’ll have to repay. Just remember, if you do want to do this, make sure to check the terms of your loan beforehand because some do include legal clauses capping how much you can overpay.

If you don’t have savings but do still have a decent credit rating, then a good choice for you could be shifting your debts over to a cheaper credit card. If they are used with discipline, credit cards are the cheapest borrowing possible because they offer some of the lowest interest rates. This is particularly true with ‘balance transfer’ deals, with many offering 0% interest for a limited period. If you are able to transfer your debts over to a card with 0% interest, it’ll reduce the charges so you can use your money to actually pay off the balance.

If you don’t have a very good credit rating and are unlikely to get accepted for a new 0% balance transfer, then it’s worth speaking to your current provider to see if they can help. They might be able to change the rate on your existing card so it’s more manageable. Sometimes, they even have existing customer offers of 0%!

Can the government help me with debt?

If your debt is classed as ‘crisis debt’, the government has launched a scheme which could help. It’s called Breathing Space and it is designed to relieve some of the pressure and stress caused by debt. It would give you a 60-day respite period during which all interest and charges on your debt would be frozen, and you wouldn’t face enforcement action from your creditors.

That being said, the scheme can only be started by a debt advice provider who is authorised by the Financial Conduct Authority (FCA), so the first and most important thing you need to do is reach out to a professional so you can get a debt management plan. We give some options in our debt counselling agency list below.

What debt counselling agencies are there in the UK?

There are lots of different agencies if you search for one, but the main thing to look for is non-profit debt counselling help. This means they’re paid to actually help you, not to make money out of you. Here are some of the biggest:

  • Citizens Advice: Citizens advice is a full debt and consumer advice service. They have special caseworkers to help with all kinds of debt and include face-to-face appointments.  
  • StepChange: StepChange is a debt charity offering a full debt service across the UK. They also have an online debt advice tool if you’re looking for more tailored advice before actually speaking to someone in person.  
  • National DebtLine: National DebtLine offer free debt advice for people in the UK, either over the phone, email or on webchat.  
  • Money Helper: MoneyHelper are government-backed and aim to make money choices clearer from debt to pensions.

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