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More than 16% of UK adults have problem debt. So if you’ve got money problems, you’re not alone. Being in debt can sometimes feel overwhelming, but with a plan and a little help you can find a route out.

Use this guide to find out why you should take action on your debt and get an idea of the support that’s out there to help you.

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Find out more about debt

Explore what being in debt means, and why you shouldn’t ignore it. 

  • Debt and you

    If you’re experiencing debt problems, you’re not alone, debt can happen to anyone. Citizens Advice in England and Wales deal with thousands of people with money problems every single day.
    People sometimes think that debt problems come from careless overspending. But the reality is that they're far more likely to be a result of an unexpected event. Losing or changing your job, becoming ill, ending a relationship, or just not having the skills to manage your money can all contribute to finding yourself with problem debt.
    If you’re managing to juggle your debts, but you can’t afford to heat your home or pay your rent, you have a problem. You need to recognise this so you can begin to sort it out. Ignoring the problem will only cause your debts to get worse. 
  • Why you shouldn't ignore debt

    You won’t solve a debt problem by ignoring it. If you’re struggling to deal with financial problems, reaching out for help might feel uncomfortable. But burying your head in the sand will actually make things more difficult in the long run.

    If you're behind on payments it can be tempting to ignore letters and phone calls from your creditors, but this can make your situation worse. You might miss important notices from the people you owe money to, like that they’ve passed your debt to a debt collection agency or are taking court action against you. Lots of these notices come with a deadline to reply if you want to avoid your creditor taking further action, so it’s not a good idea to ignore them.

    Taking control is also important for your mental and physical health. Worrying about debt can make it difficult to fall asleep, and the stress can prevent you from functioning at work or in your personal life. This could potentially make it even more difficult to reduce your debt. 

    Many creditors are more reasonable than you might expect. Some will accept payments in instalments, or work out a reduced payment plan, especially if you explain your situation so they know you’re getting help to try and sort your debt out.

  • Can other people's debt affect me?

    It used to be that everyone who lived under the same roof shared a credit history, including your tenants or children who aren’t dependent on you. That’s no longer the case. Nowadays, your credit score is only affected by your own finances and debts, and those of any financial associations you have, like any business partners you may have been linked to.
    The only way someone else’s debts could affect your ability to get credit is if you have a joint credit account or have made a joint credit application with that person, for example a mortgage. This is called a financial connection or association. Being financially associated to someone won't affect your credit score but may make a difference to how easy it is for you to get credit. It's also usually possible to remove the financial association when you're no longer associated with that person.
  • Debt management solutions

    There are many types of debt management solutions, each designed to deal with a particular situation. So it's important you get independent advice on the type of plan that's right for you.

    Below are some of the most common debt management solutions.

    Debt management plan. A debt management plan is an informally negotiated agreement between you and the people you owe money to. If you’re struggling to pay your arrears, a debt management plan could help you reduce your monthly payments to an amount you can manage.

    Debt relief order. A debt relief order (DRO) is a way to have your debts written off if you have debts of £20,000 or less and have few property and possessions. In the UK, a DRO is a simpler, cheaper alternative to bankruptcy.

    Individual voluntary arrangement. An individual voluntary arrangement (IVA) is a formal debt solution to pay back debts over a period of time. It’s a formal, legal debt solution approved by the court that creditors (the people you owe money to) have to stick to. An IVA is a form of insolvency, but it’s different to bankruptcy.

    Bankruptcy. Bankruptcy is a legal status that usually lasts for a year and affects your credit history for six years. When you’re bankrupt, your non-essential property and possessions and any excess income you have are used to pay off your creditors. At the end of the bankruptcy period, most of your debts are cancelled. Going bankrupt is one option for clearing your debts and making a fresh start, but it can have serious consequences, for example by negatively impacting your credit rating.

Next steps

Being in debt can feel overwhelming, but there’s lots you can do to find a way out. Use our action plan to discover ways you can tackle your debt and get back in control of your money.

More support

  • How to check your benefits

    This simple benefits calculator helps you find out if you’re entitled to means-tested benefits. And it’ll indicate if you’re entitled to non-means tested benefits too.
  • How to get help with your debt

    If you’ve got money troubles, a debt advisor can help you see your options and support you to make a plan. Here’s how to get independent guidance on your debt.
  • Financial Resilience Check

    Take a couple of minutes to help yourself understand whether your finances are sound now and for the future.

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