Free debt help: where to get regulated advice and what the options are
StepChange, National Debtline and Citizens Advice are free. Breathing Space, priority debts and DMP, IVA and DRO basics
If debts are becoming hard to manage, the most useful thing to know is that expert help is free. Regulated debt charities give the same advice, and often the same solutions, as fee-charging firms, without taking a cut of your money. This guide explains where to go, what Breathing Space does, which debts to pay first, and the main formal options.
Where to get free advice
- StepChange: online tool and phone advice, can set up debt management plans.
- National Debtline: phone and web chat, strong self-help guides and template letters.
- Citizens Advice: local face-to-face help plus online guidance at citizensadvice.org.uk.
- MoneyHelper, the government-backed service at moneyhelper.org.uk, can find a local adviser.
An adviser will go through your income, spending and every debt, build a budget, and tell you which options fit. You do not have to take up any of them.
Breathing Space
The Debt Respite Scheme, known as Breathing Space, is available in England and Wales. Once a regulated adviser enters you into it, most creditors must stop interest, fees and enforcement action for 60 days. Bailiffs cannot visit and creditors cannot contact you about the debts. It gives you time to get advice and set up a plan. You must keep paying ongoing bills such as rent and energy during the period. A separate mental health crisis version lasts for as long as the crisis treatment does, plus 30 days.
Priority and non-priority debts
Priority debts are the ones where falling behind has serious consequences: losing your home, losing your energy supply, a court summons or even prison in the case of council tax and fines.
| Priority debts | Non-priority debts |
|---|---|
| Rent or mortgage arrears | Credit cards |
| Council tax | Personal loans and overdrafts |
| Gas and electricity | Catalogue and store cards |
| Court fines and child maintenance | Buy now pay later |
| Income tax and VAT | Money owed to friends or family |
Pay priority debts first, even if non-priority creditors are shouting louder. Non-priority creditors can only take you to court for the money, and the court will look at what you can afford.
The formal options
Debt management plan (DMP). An informal arrangement where you make one affordable monthly payment to a provider who shares it out among non-priority creditors. Creditors often freeze interest but do not have to. Free from the debt charities. It is recorded on your credit file.
Individual voluntary arrangement (IVA). A legally binding agreement in England, Wales and Northern Ireland, set up by an insolvency practitioner, to pay what you can afford for usually five or six years, after which the rest is written off. Creditors holding 75% of the debt by value must agree. It appears on the public insolvency register and your credit file for six years. Fees are taken from your payments.
Debt relief order (DRO). For people in England, Wales and Northern Ireland with debts up to £50,000, very little spare income and few assets. Debts are frozen for 12 months and then written off. There is no fee to apply. It is applied for through an approved adviser, including the free charities.
Bankruptcy. The formal last resort for larger debts, with an application fee and serious consequences for assets and some jobs. Scotland has separate options including the Debt Arrangement Scheme and sequestration.
Why to avoid fee-charging firms
Companies advertising "write off up to 80% of your debt" are usually IVA lead generators or fee-charging DMP providers. A fee-charging DMP takes part of every payment you make, so your debts take longer to clear. Being pushed into an IVA when a DRO or DMP would suit you better can leave you paying for years. The free charities offer every option, and the debt charities can set up IVAs and DROs where they fit. Nothing you pay a firm for is unavailable free.
What to do next
- Gather statements for every debt and a rough monthly budget.
- Contact one of the free services this week.
- Tell priority creditors you are getting advice; most will pause action.
- Do not take out new credit to pay old debts while you sort a plan.