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Debt management

Anyone can get into debt, for a wide range of reasons, but it’s important to remember that you’re not alone and it’s never too early or too late to seek help.

Take the first steps to regain control and find your way back to a debt-free life.

  • Open all letters about your debts. This will give you a clear picture of how much you owe and help you prioritise your debts.
  • Decide whether you need a debt adviser if you can’t deal with your debts yourself.
  • Write a 'holding letter' to your creditors asking them to suspend any repayments and interest while you take advice. Most creditors will be reasonable if you explain the situation and show that you’re taking positive steps.
  • Make sure you’re claiming all the benefits you’re entitled to. Contact your local Age UK for a benefits check or use our online benefits calculator.
  • It's important to know that if a debt was accrued when someone has dementia, it may not be recoverable. Seek advice if the person affected by debt has dementia. 

Contact a debt adviser

A debt adviser can help you deal with your debts, but don’t be tempted to pay a debt management company – there’s a lot of free, confidential, independent help available.

The following organisations can offer debt advice:

  • Age UK – your local Age UK may offer debt advice or be able to direct you to somewhere nearby that can.
  • Business Debtline – offers telephone advice to self-employed people.
  • Citizens Advice – offers help via home visits, telephone or email.
  • Citizens Advice Consumer Service – provides telephone and online advice on consumer issues.
  • National Debtline – provides telephone and email advice. They can send you a free self-help information pack. Visit My Money Steps for a personalised action plan.
  • Payplan – provides telephone advice and can help you set up a debt management plan.
  • Shelter – provides advice around housing and homelessness, including managing debt, paying rent or mortgage arrears, and dealing with possible eviction or repossession.
  • Stepchange – provides telephone advice and has an online Debt Remedy tool that can work out the extent of your debt and give a personal action plan.

Find out what Age UK does in your area

How to pay off debt

Once you’re organised and have a clearer picture of what you owe, it’s time to look at your options.

Use your savings to start paying your debts. This can save hundreds of pounds a year in interest charges. Try to keep an emergency fund to avoid having to borrow in future.

Get a personal loan instead of using credit cards or overdrafts. They often have lower interest rates, give you certainty about monthly repayments and mean you owe just one person. Make sure you can meet the monthly repayments before taking this option.

Switch credit card debts to a 0% balance transfer credit card so you won’t have to pay interest on the balance for a fixed period. Consider any transfer fee and remember the interest rate will increase after a fixed time.

Make a repayment offer to your creditors. If you’re expecting a lump sum or increased income soon, you can ask your creditors to suspend payments on your account for a set period. This is a ‘moratorium’.

If they refuse or you have low income, offer to make small monthly payments for a set period. This shows you’re making an effort to pay your debts. If your situation doesn’t improve, ask if your creditor will consider writing off the debt altogether. The Citizens Advice website has sample letters for creditors.

If you signed a financial commitment you didn’t understand, get your debts written off. This is rare, but if you didn’t have the mental capacity to understand the contract you signed, you may be able to get it cancelled. This might be because you have a mental illness, dementia or learning disability. Get help from an advice agency or Mind.

Equity release is a way older homeowners can release cash from their home without having to move. Give equity release careful thought and seek professional advice before making a decision.

Debt consolidation explained

Consolidating your debts is a way of merging lots of different debts into one loan to lower your monthly repayments.

It's only a good idea to consolidate your debts if:

  1. you end up paying less interest than you were paying before
  2. the overall amount you repay doesn’t increase
  3. and you can afford the repayments.

You have 2 options:

  • A secured loan is rarely the best option. They often charge a high interest rate, spread your payments over a long time and secure the loan against your home. You need to consider the downside of putting your home at risk.
  • A personal loan from a bank is unsecured so your home won’t be at risk. Calculate exactly what you owe to your lenders and borrow this amount.

Paul Lewis explains why it's important to manage debts

Paul Lewis, financial expert and presenter of BBC Radio 4's Moneybox, talks about why it’s important to plan to get rid of debt.

What if you can't repay your debts

Don’t panic if you don’t have the money to pay your debts. There are still options open to you.

You may be able to freeze your repayments, arrange a ‘payment holiday’ until you’re back on your feet or reschedule your deadlines for repayment.

You may need to consider more formal ways to repay your debts. These include:

  • Debt Relief Order
  • Administration Order
  • Individual Voluntary Arrangement
  • bankruptcy.

These options will all appear on your credit file and may make it harder for you to open a bank account, get a loan or buy on credit in future. However, if you have no real way of paying off your debts, these options can help you make a fresh start.

Don’t make any decisions on your own. Talk to a debt adviser to find out more about your options.

It's important to know that if a debt was accrued when someone has dementia, it may not be recoverable. Seek advice if the person affected by debt has dementia. 

Know your priority debts

Not all debts are the same. ‘Priority bills’ are more important than others, as non-payment could lead to serious trouble. For example, if you don’t pay your mortgage, your home could be repossessed. Or if you don’t pay your electricity or gas bills, your energy supply could be cut off.

If you’re behind on any of these bills, don’t panic. Act quickly to either pay off the debts or pay it off in affordable instalments, and you should be able to stop these things from happening.

Priority bills include:

Non-priority bills include

  • catalogue debts
  • credit card debts
  • personal loans
  • money borrowed from friends and family.

Dealing with potential consequences of debt

If you can’t repay your debts, you may have to deal with the potential consequences, so it’s important that you’re prepared.

Dealing with bailiffs

Bailiffs will take possessions from people who owe money. They will sell the possessions and use the money to pay back the debt.

You don’t usually have to let bailiffs in and they can’t use force. However, if you don’t agree to pay them, they can charge you more fees or take things from outside your house, such as your car.

Bailiffs can take luxury items (e.g. a TV or games console) but not essential items (e.g. your clothes or fridge), and they can’t take someone else’s belongings.

They will charge you for the visit, but you can make a complaint if you think you were overcharged.

Before you pay a bailiff or let them in, ask for ID and a breakdown of their charges, and make sure you get a receipt for everything they take.

You should get advice or contact your creditor immediately, because you may be able to prevent further action by negotiating or making a payment.

Dealing with court action

Your creditor must send a warning letter before taking you to court. Contact them immediately to see if you can come to an affordable agreement to repay what you owe. Remember, your creditor will generally want to avoid going to court as much as you do, as this can be costly for them.

If you do have to attend court, make sure you turn up and put your case to the judge, especially if your home is at risk.

Some lenders will send letters that look like court papers to scare you. If you’re not sure about a letter, take it to a debt advice agency.

Dealing with energy supply disconnection

If you don’t pay your gas or electricity bill within 28 days of receiving it, you risk getting disconnected. However, your energy company must first send you a warning letter.

Households where all the members are of a pensionable age shouldn’t have their energy supply cut off between 1 October and 31 March.

If you’re having difficulty paying your energy bills, tell your supplier as soon as possible. It won’t cut you off if you agree and stick to a realistic payment plan or install a pre-payment meter.

Further information


Our Information guides are short and easy to digest, giving a comprehensive overview of the relevant topic. Factsheets are longer with more detail, and are aimed at professionals.

You can download other guides in our series from publications

For more information: Call Age UK Advice: 0800 678 1174

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