How to Get Out of Debt UK: 7-Step Action Plan for 2026

Quick answer: To get out of debt in the UK: (1) list all debts with balances, interest rates, and minimum payments, (2) sort them into priority (rent, council tax, utilities) and non-priority (credit cards, loans), (3) pay minimums on everything, (4) throw every spare pound at the highest-interest debt first (avalanche method), (5) seek free help from StepChange or Citizens Advice if overwhelmed. The average UK household has £2,300 in unsecured debt — you’re not alone.

How to Get Out of Debt UK: 7-Step Action Plan

Being in debt is stressful, but there’s a proven path out. This guide gives you a practical, step-by-step plan that works regardless of your debt size.

Step 1: Face the Numbers

Before anything else, you need to know exactly what you owe. Create a simple list:

Total debt: £10,900 | Total minimums: £345/month

Use our budget planner to work out how much you can afford to pay above the minimums.

Step 2: Separate Priority and Non-Priority Debts

Priority Debts (Deal with first — serious consequences)

These debts have the most severe consequences for non-payment:

• Rent or mortgage arrears — eviction or repossession
• Council Tax arrears — bailiffs, court, imprisonment (extreme cases)
• Energy bills — disconnection
• Court fines — bailiffs, imprisonment
• Child maintenance — deduction from earnings, court
• Income Tax/NI — HMRC enforcement, bankruptcy
• Hire purchase (car) — repossession

Action: Contact the creditor immediately. Offer a realistic repayment plan. Read our Council Tax Reduction guide for help with council tax.

Non-Priority Debts (Manage alongside priority debts)

• Credit cards
• Personal loans
• Overdrafts
• Buy now pay later (Klarna, Clearpay)
• Catalogue debts
• Payday loans (despite high interest, enforcement is less severe)

Action: Focus surplus money here after priority debts are managed.

Step 3: Choose Your Repayment Strategy

The Debt Avalanche (Saves Most Money)

Pay minimums on everything, then put all surplus money toward the highest interest rate debt.

Example from above: Attack the overdraft (39.9%) first, then Barclaycard (24.9%), then personal loan (12.5%).

Savings: Could save £500-£2,000+ in interest compared to minimum payments.

The Debt Snowball (Best for Motivation)

Pay minimums on everything, then put all surplus toward the smallest balance first.

Example: Clear the buy now pay later (£400) first, then the overdraft (£800), then council tax arrears.

Advantage: Quick wins build momentum. People using snowball are more likely to stick with the plan.

Which Should You Choose?

Recommendation: If you’re disciplined, choose avalanche. If you need motivation to stay on track, choose snowball.

Step 4: Find Money to Pay Down Debt

Cut Expenses

• Review subscriptions (cancel unused ones)
• Switch energy supplier — see our switch energy guide
• Reduce food spending — meal plan, batch cook
• Negotiate broadband/mobile bills

Read our budgeting on a low income guide for detailed money-saving strategies.

Increase Income

• Check benefit entitlement at entitledto.co.uk
• Sell unused items (Vinted, eBay, Facebook Marketplace)
• Take on overtime or a side income
• Claim all eligible benefits — see our Universal Credit guide

Reduce Interest Costs

• Balance transfer card: Move high-interest credit card debt to 0%. Read our balance transfer guide
• Debt consolidation loan: Combine multiple debts at a lower rate. Read our debt consolidation guide
• Overdraft switching: Some banks offer interest-free overdraft switching

Step 5: Know Your Legal Protections

UK law provides several protections for people in debt:

Breathing Space (Debt Respite Scheme)

• 60-day legal protection from creditors
• Interest and charges frozen
• No enforcement action
• Apply through a debt advisor (StepChange, Citizens Advice)
• Source: GOV.UK — Debt Respite Scheme

Debt Management Plan (DMP)

• Informal agreement to repay debts at an affordable rate
• Administered by StepChange, Payplan, or Citizens Advice
• Read our DMP guide for details

Individual Voluntary Arrangement (IVA)

• Formal, legally binding agreement
• Usually lasts 5-6 years
• Remaining debt written off at end
• Only suitable for debts over £10,000

Debt Relief Order (DRO)

• For debts under £30,000 (increased from £20,000 in 2024)
• Low income, minimal assets
• 12-month moratorium, then debts written off
• Source: GOV.UK — Debt Relief Orders

Read our debt relief options guide for a full comparison.

Step 6: Get Free Professional Help

Never pay for debt advice. These services are free:

Step 7: Stay Out of Debt

Once debt-free, build systems to stay that way:

1. Build an emergency fund — 3-6 months of expenses. Read our emergency fund guide
2. Use a budget — Track income vs spending. Use our budget planner
3. Pay credit cards in full — Never carry a balance
4. Save before buying — Avoid buy now pay later schemes
5. Check your credit report annually — Catch problems early. Read our credit score guide

Frequently Asked Questions

Sources and Further Reading

• StepChange Debt Charity — Free debt advice
• MoneyHelper — Government-backed guidance
• GOV.UK — Options for paying off your debts
• See also: Debt consolidation explained, Debt management plans, Debt relief options, Balance transfer cards, Budget planner, Emergency fund guide

Disclaimer: This guide provides general information. If you’re struggling with debt, contact StepChange (free) or Citizens Advice for personalised help. Never pay for debt advice — legitimate services are free.