1. Protect priority bills
Rent, mortgage, council tax, energy, court fines, child maintenance and essential insurance need attention before unsecured-credit optimisation.
If repayments are not affordable
2. Stop adding expensive credit
Do not use a payday loan, cash withdrawal, overdraft or new card to make an unaffordable debt look current for one more month.
3. List the facts
Write balance, lender, APR, minimum payment, arrears, next due date and whether it is priority or non-priority.
4. Contact free debt help
A trained debt adviser can talk through options such as payment plans, breathing space, debt management, insolvency routes and benefit checks.
5. Tell creditors early
If you cannot pay, contact lenders before the missed payment where possible. Keep notes of dates, names and agreements.
6. Ignore shame-based urgency
Debt is a system problem to triage. Panic usually leads to worse borrowing and poorer records.
Decision line
When not to use the calculators
If minimum payments are unaffordable, priority bills are at risk, or you are borrowing to make repayments, use free debt advice before opening another product or moving debt around.
Useful guidance
The free debt-advice landscape — and how to avoid the imposters
You never need to pay for debt advice in the UK. A network of charities and not-for-profits, all authorised by the Financial Conduct Authority (FCA), give it for free and will set up most solutions at no cost. The big names are StepChange and National Debtline (both offer phone and online advice and full debt-management support), Citizens Advice (face-to-face help across the country, strong on benefits and priority debts) and MoneyHelper, the government-backed service that runs a free debt-advice locator if you are not sure where to start.
Against that sits a commercial industry that charges for the same thing. Some fee-charging firms keep a slice of every payment, which slows your progress, and a few advertise in ways designed to look like the charities or like an official scheme. Treat these as warning signs: an up-front fee or monthly charge for advice; pressure to decide quickly; a promise to "write off" most of your debt; or a web address that mimics a charity. If in doubt, go directly to one of the named services above, or check the firm on the FCA Register before handing over any money or personal detail.
DMP, IVA, DRO or bankruptcy: matching the solution to the situation
There is no single "best" debt solution — the right one depends on how much you owe, what you can afford each month, whether you own assets such as a home, and your wider circumstances. A free adviser exists precisely to match these. The four mainstream routes in England and Wales work as follows; thresholds change, so always confirm the current figures with your adviser.
Debt Management Plan (DMP)
An informal arrangement, usually run free by a charity, where you make one affordable monthly payment that is shared between non-priority creditors. Interest is often (not always) frozen. Flexible and reversible, with no insolvency marker, but it is not legally binding, so a creditor can still pursue you. Suits people who can clear their debts in a reasonable time on a reduced payment.
Individual Voluntary Arrangement (IVA)
A formal, legally binding deal set up by a licensed insolvency practitioner: you pay an agreed amount (typically over five to six years) and the rest is written off at the end. It binds creditors once enough agree, but it is rigid, fees apply, it appears on your credit file for six years, and missing payments can collapse it. Often considered where debts are larger and a homeowner wants to avoid bankruptcy.
Debt Relief Order (DRO)
A low-cost insolvency route for people with relatively low debt, little spare income and few assets (including not owning a home). After a moratorium period the debts are written off. There are strict eligibility limits on total debt, assets and surplus income, and a DRO can only be set up through an authorised adviser. Suits those with no realistic prospect of repaying but who do not need full bankruptcy.
Bankruptcy
A formal insolvency you can apply for online for a fee. Most remaining debts are written off, usually with discharge after about a year, but assets including property may be sold and a payment arrangement can be required from income. It carries the heaviest credit-file and practical consequences. Sometimes the cleanest route where debts are large and unrepayable and there is little to lose.
Scotland has its own framework, including the Debt Arrangement Scheme, Minimal Asset Process and sequestration; the principles are similar but the rules and names differ. The mechanism matters more than any single number: each route trades off how much you repay, how long it lasts, what happens to your assets, and how long it marks your credit file.
Your first three steps, and the Breathing Space option
Before choosing any solution, do three things. List every debt — balance, who it is owed to, interest rate and whether it is priority or non-priority. Prioritise rent, mortgage, council tax, energy and court fines ahead of cards and loans, because the consequences of missing those are far more serious. Get free advice from one of the services above, who will build a budget creditors recognise and recommend a route.
If creditor pressure is the immediate problem, ask your adviser about Breathing Space (the Debt Respite Scheme in England and Wales). It gives most debts up to 60 days with interest, fees and enforcement paused, accessed only through a regulated debt adviser; a separate mental-health crisis version lasts for the duration of crisis treatment plus 30 days. It buys time to get advice in place — it is not a solution on its own.
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