Ways to pay off and clear debt

If you’re keen to clear your debts as quickly as possible or struggling to make your monthly repayments, the first thing you need to do is make a budget.

Listing all the money you have coming in, along with all your outgoings, will help in a few ways:

• Firstly, it’ll make it easier to spot where savings can be made.
• Secondly, you’ll see exactly how much disposable income you have for your debts.

You might find you have extra money available that could help you pay off your debts quicker. Just check for any overpayment penalties.

On the other hand, if the money you’ve got coming in doesn’t cover your essential living expenses, get debt advice as soon as possible. Your financial situation is only going to get worse while this is the case. 

Whether you’re looking to pay off your debts as quickly as possible or struggling to keep up with your agreed repayments, it’s a good idea to see if you can boost your income.

A good place to start is to check you’re not missing out on any benefits you’re entitled to.

You may also want to look into whether you’re entitled to any grants.

If you’re struggling to cover all your debts, focus on priority debts first.  These are the ones that could have the most serious consequences if you don’t pay them, such as losing your home or having your gas or electricity supply cut off.

They include:

• rent arrears
• mortgage arrears
• overpaid benefits
• gas and electricity debts
• council tax arrears

Yes. If you’re falling behind with debts, it’s well worth contacting your creditors to discuss options such as:

• payment holidays
• repayment plans
• freezing interest and fees
• suspending legal action

There’s no guarantee creditors will agree to any of these options, but they have a responsibility to help people who are struggling, so it’s worth asking.

If you don’t engage with creditors and agree on how to repay your debts, they could take legal action. This might involve asking for a county court judgment (CCJ) against you.

If you can’t repay your debts in a reasonable amount of time, then you might be able to write off some or all of what you owe.

You may be able to do this with a debt solution.

Or, in some circumstances, you may be able to get debt written off for medical reasons, either because of poor physical or mental health.

If you think you might be a suitable candidate for medical write-off, we can help with this. Creditors will examine each request on a case-by-case basis.

Finally, if you have no contact with a creditor about a debt for six years, they may be barred from taking court action to try and recover their money. 

If you can’t manage your debts, get in touch.

We can offer budgeting help and advise you on a range of debt solutions, such as:

• a debt management plan
• a debt relief order
• an individual voluntary arrangement
• bankruptcy

You might also qualify for breathing space, which gives you temporary protection from creditors you owe money to while you sort out a longer-term solution to your money worries.