Debt help: what to do if you cannot pay

Debt help works best when it is practical. You do not need a perfect spreadsheet before asking for advice, but you do need a clear enough picture to stop the worst consequences and choose the right solution.

This guide is for people in England and Wales who are dealing with unsecured debts, arrears, creditor pressure, or uncertainty about which debt option fits. Scotland and Northern Ireland have different rules for some solutions.

Urgent letters and deadlines

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If a deadline letter, court form, bailiff notice, or old-debt warning has arrived, use the specific guide before agreeing payments. These pages are designed for high-pressure searches where the wrong response can make the situation worse.

Step 1: separate urgent debts from unsecured debts

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Not every debt has the same consequence. Some debts can affect your home, utilities, liberty, employment or possessions more quickly than others. These should usually be treated as priority debts.

Unsecured debts are still important, but they usually come after priority bills when working out a safe budget. These include credit cards, personal loans, overdrafts, catalogues, payday loans, store cards and many debts passed to debt collectors.

Step 2: get the full debt picture

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Write down every creditor, balance and stage of collection. If you do not know the exact figure, use the latest letter, app, credit report or creditor statement.

For each debt, note:

• creditor name
• current balance
• account reference
• whether payments are up to date
• whether a default, CCJ or enforcement letter has arrived
• whether the debt is joint with another person
• whether the debt is secured on a home or vehicle

This matters because a debt solution is only as good as the information used to build it. Missing a creditor can cause problems later, especially with formal insolvency options.

Step 3: build a real household budget

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A useful budget is not the lowest number you can survive on for one month. It should be realistic enough to hold up over time.

Include:

• rent or mortgage
• council tax
• energy, water and broadband
• food and household costs
• travel and vehicle costs
• childcare
• prescriptions and health costs
• insurance
• clothing
• school costs
• emergency or irregular expenses

Your spare income is what remains after essential costs and priority debts. That number decides which debt solutions are realistic.

Step 4: stop pressure while you choose

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If you are being chased and need time to get advice, ask a debt adviser about the Debt Respite Scheme, commonly called Breathing Space.

Standard Breathing Space can give you up to 60 days of protection from most creditor contact, interest and enforcement action while you work with an adviser. It is not a debt solution by itself. It is a pause so you can choose properly.

There is also a mental health crisis Breathing Space route with different rules for people receiving approved mental health crisis treatment.

Step 5: compare the main debt help options

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The right answer depends on your debt level, assets, income, home ownership and whether you can repay in full.

Be wary of any advice that jumps straight to one solution before checking the rest.

Common debt types to check next

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Some debts need a more specific plan before you choose an IVA, DMP, DRO or informal arrangement. Use these guides if one of these debts is part of the problem:

Situation-specific debt help

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Some searches are about the household situation rather than the creditor. These guides help narrow the advice before choosing a debt solution:

Step 6: choose the option by situation

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If you can repay in full but need lower payments, a DMP may be enough. It is flexible, but it does not force creditors to freeze interest or stop action.

If you have very low spare income, few assets and no home, a DRO may be better than an IVA because it does not require monthly payments.

If you own a home, have regular income and cannot repay unsecured debts in a reasonable time, an IVA may be worth exploring because it can protect assets better than bankruptcy.

If you have no realistic way to pay and do not have assets to protect, bankruptcy may need to be considered.

Step 7: avoid common debt help mistakes

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The biggest mistakes are usually made under pressure.

Avoid:

• paying unsecured creditors before urgent household bills
• taking a high-cost loan to cover existing repayments
• using a debt consolidation loan if the rate or term makes things worse
• ignoring court letters or enforcement notices
• sharing sensitive details with unclear lead-generation sites
• agreeing to an IVA, DMP or loan before seeing the full pros and cons

Step 8: get the documents ready

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Before speaking to an adviser, gather what you can:

• recent bank statements
• wage slips or benefit award letters
• rent or mortgage details
• creditor letters
• council tax and utility arrears letters
• vehicle finance details
• details of any assets, savings or property

Do not delay getting help because something is missing. A good adviser can tell you what to find next.

What to do today

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If you are overwhelmed, keep the next step small:

1. List urgent debts.
2. Work out this month’s essential bills.
3. Stop any payments you cannot afford to non-priority creditors until you have advice.
4. Ask about Breathing Space if creditor action is escalating.
5. Compare DMP, DRO, IVA vs DMP, IVA vs DRO and bankruptcy before choosing.

If you have unsecured debts and can afford some monthly payment, use the free IVA calculator to see whether an IVA may be suitable. If it is not, you will still have a clearer starting point for the right debt help route.