Finding yourself in debt can feel overwhelming – especially when there are so many options to choose from. If you’re wondering which debt solution is right for you, this tool-style guide is here to help.
We’ve broken down some of the most common debt situations and matched them to possible solutions to consider. Everyone’s circumstances are different, so it’s important to explore all your options before making a decision.
For tailored advice, it’s always best to speak to a qualified debt adviser. But this guide will give you a clearer idea of where to start.
You can make reduced payments but need flexibility
If you’re able to pay something towards your debts each month, but not the full amount, a Debt Management Plan (DMP) might be suitable.
A DMP is an informal arrangement between you and your creditors. You make one monthly payment, and this is split across your debts. It doesn’t write off any debt, but it can help make payments more manageable and stop further charges being added.
This may be the best debt solution for you if:
- You want a flexible, informal solution.
- You have multiple unsecured debts (like credit cards or loans)
- You can afford regular payments but need them to be lower
You need some debt written off and want protection from creditors
If your debts have become unmanageable and you need a formal agreement that could reduce the total you repay, an Individual Voluntary Arrangement (IVA) may be worth considering.
An IVA is a legally binding agreement that typically lasts five or six years. You make monthly payments based on what you can afford – and any debt remaining at the end may be written off.
An IVA could be suitable if:
- You owe £6,000 or more to two or more creditors
- You have a regular income and can commit to fixed monthly payments
- You want legal protection from further action.
You have little or no income and limited assets
If your financial situation is unlikely to improve, and you have no way of repaying your debts, you might need a more permanent solution. In this case, bankruptcy or a Debt Relief Order (DRO) could be appropriate.
A Debt Relief Order is available if you owe less than £50,000, have few assets, and a low income. It freezes your debts for 12 months, and if your situation doesn’t change, the debts included in the DRO are written off.
Bankruptcy is a formal process where most debts are cleared, but it can have longer-term consequences for your credit and assets.
These solutions might be suitable if:
- You have no realistic way to repay your debts
- You have no valuable assets (e.g. property or savings)
- Your income is very low or zero.
You’ve fallen behind on priority bills
If your main debts are things like rent, council tax or utility bills, known as priority debts, it’s important to act quickly. These types of debt can have more serious consequences, including eviction or loss of services.
In this case, the first step is to contact the organisation you owe and explain your situation. In parallel, you may benefit from debt advice to see how these debts fit into your wider financial picture.
You may still be able to use a DMP, IVA or other solution, but the immediate focus should be on urgent bills.
You’re unsure what you owe or who to pay
If you’re not sure how much debt you have, or you’ve lost track of who your creditors are, the best starting point is to get a full picture of your debts. You can:
- Request your credit report from major UK agencies (Experian, Equifax, TransUnion)
- Review any unopened or recent letters
- Contact a debt adviser who can help you list everything out.
Once you’ve done this, you’ll be in a better position to understand the UK debt solutions available and which one suits your needs.
How to choose debt help
Choosing a debt solution isn’t just about what you owe – it’s about your income, future plans, home, and family. Before deciding, ask yourself:
- Can I make any payments towards my debts each month?
Knowing whether you can afford regular repayments will help determine if solutions like a DMP or IVA are suitable, or if something like a DRO or bankruptcy is more realistic.
- Is my situation likely to improve or stay the same?
If your income or circumstances are expected to change soon, that may affect the type of solution that fits best now and in the long term.
- Do I have any assets (like a home or car) I need to protect?
Some debt solutions could impact your home or possessions, so it’s important to understand the risks before moving forward. - Do I want an informal solution or something more structured?
Informal arrangements can offer flexibility, while formal ones provide legal protection – the right choice depends on your needs and preferences.
You don’t have to figure this out alone. Speaking to a professional debt adviser can help you weigh up the pros and cons.
Finding the best debt solution for me in the UK
When it comes to finding the debt solution, there’s no one-size-fits-all. What works for someone else might not work for you. That’s why we always recommend getting tailored advice before making any decision.
At MoneyPlus, we’ve helped thousands of people explore their options. Need UK debt solutions explained? Contact us to help you find the most suitable path forward. You can also visit MoneyHelper for free, impartial advice.
