Options for dealing with your debts (2024)

If you owe people money (your ‘creditors’) you can make arrangements to pay your debts. Your options depend on the amount of money and assets you have.

Where you can get help

Speak to a debt adviser to get help choosing the best way to deal with your debt.

MoneyHelper has information about debt management and free debt advisory services.

Paying off your debts

You can pay your debts in instalments by setting up:

You can also get temporary protection from your creditors through the ‘Breathing Space’ scheme, while still making repayments. You’ll need to apply through a debt advisor.

In Scotland you can arrange a Debt Payment Programme from the Debt Arrangement Scheme.

You may also have the option of reaching an informal agreement with your creditors.

If you cannot pay off your debt

You can apply for a Debt Relief Order or Bankruptcy Order if you cannot pay your debts because you do not have enough money or assets you can sell.

If you cannot pay off your debts, you can be made bankrupt.

Options for dealing with your debts (2024)

FAQs

What is the best way to deal with debt? ›

  1. Basic steps to help you deal with a debt. ...
  2. Step one - make a list of everything you owe. ...
  3. Step two - put your debts in order of importance. ...
  4. Step three - work out a personal budget. ...
  5. Step four - get independent advice. ...
  6. Step five - talk to your creditors. ...
  7. More useful links.

What is my best option to get out of debt? ›

  • List out your debt details. ...
  • Adjust your budget. ...
  • Try the debt snowball or avalanche method. ...
  • Submit more than the minimum payment. ...
  • Cut down interest by making biweekly payments. ...
  • Attempt to negotiate and settle for less than you owe. ...
  • Consider consolidating and refinancing your debt. ...
  • Work to boost your income.
Mar 18, 2024

What can I do if I can't pay my debts? ›

Ways to clear your debt
  1. Informally negotiated arrangement.
  2. Free debt management plan (DMP )
  3. Individual voluntary arrangement (IVA)
  4. Bankruptcy.
  5. Debt relief order (DRO)
  6. Administration order.
  7. Debt consolidation and credit.
  8. Full and final settlement offer.

What's the smartest way to get out of debt? ›

Consider the snowball method of paying off debt.

This involves starting with your smallest balance first, paying that off and then rolling that same payment towards the next smallest balance as you work your way up to the largest balance. This method can help you build momentum as each balance is paid off.

Is 20k in debt a lot? ›

“That's because the best balance transfer and personal loan terms are reserved for people with strong credit scores. $20,000 is a lot of credit card debt and it sounds like you're having trouble making progress,” says Rossman.

How to pay $30,000 debt in one year? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

How can I get out of $20000 debt fast? ›

If you have $20,000 in credit card debt that you need to pay off in three years or less, you have multiple options to consider, including:
  1. Take advantage of a debt relief service.
  2. Consolidate your debt with a home equity loan.
  3. Take advantage of 0% balance transfer credit cards.
May 22, 2024

How long will it take to pay off $30,000 in debt? ›

The minimum payment approach

If you only make the minimum payment each month, it will take about 460 months, or about 38 years, to pay off that $30,000 balance.

How to pay off debt when you are broke? ›

How to get out of debt when you have no money
  1. Step 1: Stop taking on new debt. ...
  2. Step 2: Determine how much you owe. ...
  3. Step 3: Create a budget. ...
  4. Step 4: Pay off the smallest debts first. ...
  5. Step 5: Start tackling larger debts. ...
  6. Step 6: Look for ways to earn extra money. ...
  7. Step 7: Boost your credit scores.
Dec 5, 2023

How do I pay off debt I can't afford? ›

Here are some debt-relief options to consider.
  1. Create a Budget. ...
  2. Do Nothing and Get Debt Relief That Way. ...
  3. Negotiate With Your Creditors to Get Debt Relief. ...
  4. Seek Debt-Relief Assistance From a Consumer Credit Counseling Agency. ...
  5. File for Bankruptcy to Get Debt Relief. ...
  6. Get Help With Your Federal Student Loans.

How can I legally avoid paying debt? ›

Legal Ways to Cease Credit Card Payments
  1. Debt Settlement. Debt settlement is a process that involves negotiating with creditors to pay less than the full amount you owe. ...
  2. Debt Management Plan (DMP) ...
  3. Bankruptcy.

Can I get a government loan to pay off debt? ›

While there are no government debt relief grants, there is free money to pay other bills, which should lead to paying off debt because it frees up funds. The biggest grant the government offers may be housing vouchers for those who qualify.

What is crippling debt? ›

crippling debt n

figurative (owing too much money)

How to aggressively pay off debt? ›

What's the best way to pay off debt?
  1. The snowball method. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. ...
  2. Debt avalanche. Pay the largest or highest interest rate debt as fast as possible. Pay minimums on all other debt. ...
  3. Debt consolidation.
Aug 8, 2023

Is the National Debt Relief Program legit? ›

Is National Debt Relief legit? National Debt Relief is an accredited member of the American Association for Debt Resolution (AADR). It has been around since 2009 and has helped over 600,000 individuals reduce their debt. It also has an A+ rating from the BBB (Better Business Bureau).

What are the 3 biggest strategies for paying down debt? ›

What's the best way to pay off debt?
  • The snowball method. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. ...
  • Debt avalanche. Pay the largest or highest interest rate debt as fast as possible. Pay minimums on all other debt. ...
  • Debt consolidation.
Aug 8, 2023

What is the best way to settle debt? ›

Consult a Credit Counselor
  1. Determine If Negotiation Is Right for You.
  2. Set Your Terms.
  3. Tell the Truth and Keep a Consistent Story.
  4. Learn Your Rights Under the Fair Debt Collection Practices Act (FDCPA)
  5. Keep Detailed Communication Notes.
  6. Negotiate with Creditors Directly.
  7. Get All Agreements in Writing.

What is the best way to take care of debt? ›

7 steps to more effectively manage and reduce your debt
  1. Take account of your accounts. ...
  2. Check your credit report. ...
  3. Look for opportunities to consolidate. ...
  4. Be honest about your spending. ...
  5. Determine how much you have to pay. ...
  6. Figure out how much extra you can budget. ...
  7. Determine your debt-reduction strategy.

How to pay off 20k in debt? ›

If you have $20,000 in credit card debt that you need to pay off in three years or less, you have multiple options to consider, including:
  1. Take advantage of a debt relief service.
  2. Consolidate your debt with a home equity loan.
  3. Take advantage of 0% balance transfer credit cards.
May 22, 2024

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