The short version: If you’re in serious debt and feel like you’re drowning, you are not alone and there is a way through — but you need proper help, not willpower. Free, professional debt advice from charities like StepChange is the single best first step. They will look at your full picture and recommend the right option: a Debt Management Plan (DMP), an Individual Voluntary Arrangement (IVA), bankruptcy, or a breathing space. None of these options are as scary as the debt itself.
There’s a difference between carrying debt and being in serious debt. Carrying debt is stressful. Serious debt — where you’re missing payments, fielding calls from creditors, borrowing to pay borrowing — is something else. It can feel like quicksand.
If that’s where you are: this post is for you. Not for the person with a £500 credit card balance. For the person who genuinely doesn’t know how to get out.
I worked in financial crime and compliance for ten years, including at Monzo and Starling Bank. I’ve seen what happens to people who don’t get help early enough — and what changes when they do. Here’s what you need to know.
What counts as “serious debt”?
There’s no official threshold, but these are signs that you’re beyond the stage of budgeting your way out:
- You’re missing minimum payments on credit cards, loans, or your rent/mortgage
- You’re borrowing (credit cards, overdraft, friends and family) to cover basic living costs
- You’re being contacted by debt collectors or receiving County Court Judgments (CCJs)
- Your debt total is more than you could realistically clear in a few years at your current income
- You’re hiding the situation from people close to you
If several of these apply, you need professional debt advice — not a budgeting spreadsheet.
Where do I get free, proper debt help in the UK?
There are three organisations you can trust completely. They are free, confidential, and regulated. They do not make money from the advice they give you.
- StepChange Debt Charity (stepchange.org) — the largest free debt advice charity in the UK. Online debt advice tool available 24/7, or you can speak to an adviser.
- National Debtline (nationaldebtline.org) — free advice by phone and online. Excellent if you want to understand your options before speaking to anyone.
- Citizens Advice (citizensadvice.org.uk) — broad financial advice including debt; local offices and online resources.
These services will not judge you. They have heard every situation. The only wrong move is not calling.
What are the main debt solutions available in the UK?
| Option | What it is | Best for | Effect on credit file |
|---|---|---|---|
| Debt Management Plan (DMP) | Informal arrangement — you make one monthly payment to a charity who distributes it to creditors | People who can afford reduced payments over time | Negative while active, recovers after |
| Individual Voluntary Arrangement (IVA) | Legally binding agreement — fixed monthly payments over ~5 years, remainder written off | Higher debt levels, some disposable income | 6 years on credit file |
| Debt Relief Order (DRO) | For debts under £30,000, assets under £2,000, income under £75/month surplus | Low income, low assets | 6 years on credit file |
| Bankruptcy | Debts written off, assets assessed — typically discharged in 12 months | When no other option is viable | 6 years on credit file |
| Breathing Space | 60-day pause on creditor contact and enforcement while you get advice | Anyone needing time to get advice | Minimal immediate impact |
A debt charity will recommend which is right for you based on your actual numbers — not a general guide. That’s why getting proper advice matters.
What is Breathing Space and should I use it?
Breathing Space (also called the Debt Respite Scheme) is a government scheme that gives you 60 days of protection from creditors contacting you and most enforcement action. You access it through a debt advice charity.
If you’re feeling overwhelmed and can’t think straight about your options, Breathing Space buys you time to do that. Use it.
Does going through a debt solution ruin your life?
Not permanently, no. Yes, a DMP, IVA, DRO or bankruptcy will affect your credit file — typically for six years. During that time, getting new credit will be harder and more expensive. But people rebuild. Credit files aren’t permanent. And the alternative — carrying unmanageable debt indefinitely — is worse, both financially and for your health.
The debt does not define you. Getting help is not failure. It is the opposite.
Grace’s story: the call that changed everything
Grace, 34, had £18,000 across four credit cards, a personal loan, and an overdraft she’d been living in for three years. She was paying minimums on everything, using one card to cover another, and not opening post she recognised as debt-related.
She called StepChange on a Tuesday evening, expecting to feel judged. She didn’t. The adviser went through her full income and expenditure, and within 45 minutes told her she was eligible for a DMP. One affordable monthly payment. All creditor calls would stop. No fees.
She’d been dreading that call for two years. She told me afterwards it was the most relieved she’d felt in as long as she could remember.
The M&G System: do this this week
- Write down every debt. Creditor, balance, minimum payment, interest rate. Seeing it all in one place is hard, but it’s the start. Use the free I&E Tracker to do this properly.
- Contact StepChange (stepchange.org) or National Debtline this week. Use their online tool if phoning feels too much. This single action is worth more than any amount of research.
- Apply for Breathing Space if you need it. If creditors are already calling or you’ve received legal correspondence, ask your debt adviser about Breathing Space as a first step. It gives you time to think.
To get a full picture of what you owe and what you can afford to pay, use the free Income & Expenditure Tracker at moneyandgrowth101.com/tools/ before you speak to a charity. It’ll help you go into that conversation prepared.
And if you want to talk through your situation before picking up the phone to a charity — just to make sense of it first — book a free Money Clarity Call. No pressure, no judgement, just clarity. 20–30 minutes.
Two ways to go further
If you would rather have the whole thing in order instead of one post at a time, that is what the book does.
Money & Growth 101 — the no-fluff UK guide to clearing debt and building real wealth.
Prefer to talk it through first? A Money Clarity Call is 20–30 minutes, free, and there is no pressure either way.
Frequently asked questions
Will my employer find out if I go bankrupt or get an IVA?
In most cases, no. Bankruptcy and IVAs are recorded on the Individual Insolvency Register, which is publicly available but not something employers routinely check. There are exceptions — some regulated roles in financial services require disclosure. Check your employment contract or speak to Citizens Advice if you’re concerned.
Can I keep my bank account if I go bankrupt?
Possibly, but not guaranteed. Your bank may close your account if you’re declared bankrupt. Most basic bank accounts (offered by major banks for free) will remain open, and you can switch to one before or shortly after. A debt adviser can tell you which banks are most debt-friendly.
What’s the difference between a DMP and an IVA?
A DMP is informal — your creditors agree to it but aren’t legally bound. An IVA is a legally binding agreement set up by an insolvency practitioner. IVAs often involve some debt being written off at the end; DMPs don’t. IVAs are better for larger debts; DMPs are better for people who want to repay in full but need more affordable terms.
Can I get a mortgage after an IVA or bankruptcy?
Yes — eventually. Most mortgage lenders require at least three years after an IVA completes or bankruptcy is discharged. Some specialist lenders will consider applications sooner. It will affect the rates you’re offered, but it’s not a permanent door closing.
Should I pay a company to help me with my debt?
No. Free debt charities (StepChange, National Debtline, Citizens Advice) offer exactly the same range of solutions as paid debt management companies — without the fees. Those fees can add thousands to your costs. Always start with a free charity.
Related reading: The 3 Debts to Clear First (and Why) · How to Clear Debt on a Normal UK Salary · The Mental Side of Money
Mustafa Alsoodany is the founder of Money & Growth 101. By day he’s worked in financial crime and compliance at banks and fintechs — JPMorgan, Monzo, Starling and Barclaycard among them — and holds the ICA Advanced Certificate in Anti-Money Laundering at Distinction. He started Money & Growth 101 to do the opposite of the day job: make money plain, jargon-free and genuinely doable for people in their 20s and 30s who were never taught it.