Repaying, prioritising and asking for help

Most people who feel overwhelmed by debt have never seen all of it in one place. Do that first. It is uncomfortable for an evening and useful for years.

Open the envelopes. Letters often contain deadlines and options that disappear if they are ignored.

Before you sign: add the new agreement to this list and look at the total, not just the new line.

Work out what comes in each month after tax, and what has to go out for you to live: housing, energy, water, food, travel to work, childcare, phone, insurance you need. What is left is what you can realistically put towards debts. If that number is too small, no repayment order will work by itself, and that is the moment to get free advice.

1. Use real figures. Take them from bank statements, not memory. Irregular costs, such as car repairs or birthdays, count too: divide the yearly total by twelve.

2. Line up the dates. Move payment dates, where lenders allow it, so they fall after your income arrives.

3. Keep a small buffer. Even a little set aside stops a broken boiler becoming a new borrowing decision.

4. Review monthly. Plans drift. A ten-minute check each month keeps them honest.

Before you sign: put the new monthly payment into this budget and see what is left.

Debt advisers sort debts by consequence, not by size or by how often the creditor calls. Priority debts are the ones where not paying can cost you your home, your energy supply, your liberty or essential goods.

Non-priority does not mean unimportant. It means the creditor’s options are slower and more limited, so these debts can be dealt with once the essentials are secure.

Before you sign: never borrow on a non-priority product to pay a priority debt without free advice first.

Once priority bills and minimum payments are covered, any spare money can go to one debt at a time. Three common approaches:

Highest rate first

Extra money goes to the debt with the highest interest rate. Usually the cheapest overall, because the most expensive borrowing shrinks first.

Smallest balance first

Extra money goes to the smallest debt. Costs a little more, but clearing whole debts quickly helps some people keep going.

Shared fairly

When there is not enough for every minimum, advisers offer each creditor a share in proportion to what is owed. Creditors are more likely to accept an offer that is visibly fair.

The best method is the one you will actually follow. What matters more is not adding new borrowing while you pay down the old.

Before you sign: ask whether new credit fits your repayment plan or quietly undoes it.

None of these on its own means disaster. Two or three together mean it is time to stop, look at the whole picture and talk to a free adviser.

• Using credit to pay for food, rent or bills most months.
• Borrowing to make repayments on other borrowing.
• Only ever paying the minimum on cards, with balances not going down.
• Regularly going into an unarranged overdraft before payday.
• Missing payments, or juggling which bill to leave this month.
• Not opening post or answering calls because of what they might say.
• Losing sleep, or keeping spending secret from people you live with.

Before you sign: if any of these sound familiar, talk to free debt advice before taking on new credit.

Lenders regulated in the UK are expected to treat customers in financial difficulty fairly and with forbearance. In practice that can mean accepting lower payments for a while, pausing or reducing interest and charges, or giving more time. It works far better when you contact them before arrears build up.

In England and Wales there is also a government-backed breathing space scheme. Through a debt adviser you can get up to 60 days during which most creditors must pause enforcement and stop adding most interest and charges. Scotland has its own similar protection.

Before you sign: know the lender’s contact route if you ever need to ask for help with this agreement.

• Judging by the monthly paymentLook at the total amount repayable instead. A small payment can sit on top of a large total.
• Borrowing to cover a shortfall that repeatsIf the gap returns every month, credit only delays it and adds a cost.
• Several applications at onceEach hard search is visible to lenders. Use soft eligibility checks and compare first.
• Signing under time pressureA good agreement will still be there tomorrow. Pressure to sign today is a reason to wait.
• Turning unsecured debt into secured debtConsolidating onto your home can put the home at risk. Get free advice first.
• Paying for help that is freeFee-charging debt firms do work that free, impartial services do at no cost to you.
• Lending your nameCo-signing or taking credit for someone else makes you responsible for it.
• Unlicensed lendersAnyone lending without authorisation is acting illegally. Check the Financial Conduct Authority register.

Before you sign: read this list once more and make sure none of it describes what you are about to do.

Free debt advice is confidential, non-judgemental and does not depend on how much you owe. The services below are public or charitable. We have no link with any of them and receive nothing for mentioning them.

• MoneyHelperFree, impartial money and debt guidance backed by the government. It can also point you to a free debt adviser near you.
• Citizens AdviceA charity offering free, confidential advice on debt, benefits and housing, in person, by phone and online.
• National DebtlineA charity providing free debt advice by phone and online for people in England, Wales and Scotland.
• StepChange Debt CharityA charity offering free debt advice and, where it fits, free debt solutions.
• Financial Conduct Authority registerThe public register of firms and individuals authorised by the UK financial regulator. Use it to check that a lender or broker is authorised before you deal with it.
• Financial Ombudsman ServiceA free service that settles complaints between consumers and financial businesses, once you have complained to the business first.

Before you sign: if you are borrowing because of money worries, talk to one of these services first.