Dealing With Debt in the UK, Practical Steps to Take Back Control

Dealing With Debt in the UK, What I’ve Learned From Lived Experience

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Quick Summary, Dealing With Debt at a Glance

If you’re skimming this post, here’s what matters most.

• Start by facing the numbers, write down every debt so you know where you stand

• Deal with priority debts first, rent, mortgage, council tax, energy, and fines

• Non-priority debts like credit cards come after essentials are covered

• Use the snowball method if motivation helps you stick with it

• Use the avalanche method if reducing interest is your main goal

• Small changes, switching providers, cashback, food savings, add up quickly

• Bankruptcy and IVAs are serious decisions and should be a last resort

• Free, independent debt advice is available and worth using early

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If you’re dealing with debt right now, you probably don’t need motivation, you need a plan.

This guide is based on my own experience of business debt, a personal guarantee, and bankruptcy, plus the practical steps I use today to keep spending under control. It’s a blend of reassurance and no-nonsense, because panic doesn’t help, but avoidance makes everything worse.

Dealing with debt is far more common than people realise, yet it’s still something many people struggle to talk about openly. Most people in debt are not reckless or irresponsible. They are dealing with rising living costs, unexpected expenses, and financial pressure that builds quietly over time. When debt is left unspoken and avoided, it often becomes far harder to manage than it needs to be.

I’ve been there. My experience with debt didn’t come from overspending or lifestyle inflation. It came from a business failure and a personal guarantee on a large amount of money. When the business folded, that debt didn’t disappear. It landed with me, and I tried everything I could to deal with it myself.

How My Debt Built Up and Why It Became Unmanageable

When the business closed, my first instinct was to take responsibility and keep paying. I tried to manage the repayments and avoid drastic action, believing that with enough effort, I could get through it. The reality was very different. The scale of the debt meant it simply wasn’t financially viable for me to repay, no matter how hard I tried.

I couldn’t keep up with the payments, and the pressure escalated quickly. Phone calls turned into emails, emails turned into letters, and eventually, people started turning up at the door. That constant sense of being chased made it impossible to relax. Every knock, every envelope, every unread email carried anxiety with it, and the mental toll was immense.

Eventually, a debt collector was direct with me. They told me there was no realistic way I would ever be able to pay this debt off and that bankruptcy was the only option left. That was a brutal moment, but it was also the point where I had to stop fighting reality and start dealing with it properly.

The Mental Health Impact of Debt

Debt is not just a financial problem. It is a mental health problem.

During that period, sleep was poor, stress was constant, and there was always a sense of dread about what might happen next. You start worrying about the postman. You hesitate before opening emails. You feel permanently on edge, waiting for the next issue to land.

That level of stress is exhausting, and ignoring it doesn’t make it go away. In my case, taking decisive action was the only way to stop the cycle. Doing nothing was far more damaging than facing the consequences of dealing with it head-on.

Bankruptcy, Necessary for Me but Not a Shortcut

For me, bankruptcy was the right decision. There were no other realistic options left, given the size of the debt and my income. That doesn’t mean it’s the right choice for everyone, and it certainly isn’t an easy way out.

One of the biggest misconceptions I see is that bankruptcy or an IVA is a quick fix. It isn’t. The repercussions last for years. Your credit file is affected for six years, access to credit becomes difficult, insurance can be more expensive, and things like renting or applying for a mortgage become much harder. Even basic financial products can be restricted.

In my situation, it was unavoidable and ultimately necessary. For many others, there may be alternatives that are less damaging in the long term. That’s why professional, independent advice is so important before making any formal debt decision.

Dealing With Debt Starts With Facing the Numbers

Avoidance is one of the biggest reasons debt spirals. I know this because I tried it.

The first practical step in dealing with debt is to get everything down on paper. That means listing every debt, who it’s with, how much is owed, the interest rate, and the minimum payment. It’s uncomfortable, but it gives you clarity. Once you can see the whole picture, you can make informed decisions rather than react emotionally.

Clarity brings control, and control is what reduces stress.

Priority Debts Always Come First

Not all debts are equal, and this is something people often misunderstand.

Priority debts are those that can seriously affect your living situation if ignored. These include rent or mortgage payments, council tax, gas and electricity, water, and court fines. These must always be dealt with first, because they protect your home and basic needs.

Credit cards, loans, and overdrafts still matter, but they come after essentials. Keeping a roof over your head and food on the table has to take priority over everything else.

How to Tackle Non-Priority Debts, Snowball vs Avalanche

Once your priority debts and essential bills are under control, the next question is how to tackle the rest. This is where most people feel stuck, because they have multiple credit cards, loans, or overdrafts and don’t know where to start.

Two common approaches that actually work are the snowball method and the avalanche method. Neither is right nor wrong. The best option is the one you can stick to.

The snowball method focuses on clearing the smallest balance first, regardless of interest rate. You make minimum payments on everything else and throw any extra money at the smallest debt until it’s gone. Once that’s cleared, you move on to the next smallest. The benefit of this approach is psychological. Debts disappear faster, which can feel reassuring and motivating, especially if you’re overwhelmed.

The avalanche method takes a more mathematical approach. Instead of starting with the smallest balance, you focus on the debt with the highest interest rate first. You still make minimum payments on everything else, but any extra money goes towards the most expensive debt. Over time, this saves you more money in interest and usually gets you debt-free faster overall.

In practice, the difference often comes down to mindset. If motivation is your biggest struggle and seeing progress helps you stay on track, the snowball method can be very effective. If your main goal is reducing interest and you’re comfortable with slower visible progress at the start, the avalanche method may suit you better.

What matters most is consistency. Dealing with debt isn’t about finding the perfect strategy, it’s about choosing an approach and sticking with it long enough for it to work.

Tracking Spending Is Not Optional

Even now, I still track my spending regularly. Sometimes weekly, sometimes daily, depending on how tight things feel. That habit alone has prevented problems more than once.

Using AI to review bank statements, with all personal details removed, was a real eye-opener. It highlighted subscriptions I had forgotten about, bills that had crept up quietly, and spending patterns that didn’t feel significant day to day but added up quickly. Realising I was paying close to £100 a month for TV channels was the push I needed to renegotiate and eventually switch.

Switching Providers and Cutting Waste

I didn’t suddenly earn more money. I stopped wasting it.

By switching my entertainment provider, I saved £50 a month. Changing my household insurance saved another £15 a month. That’s roughly £750 a year, simply from reviewing and switching existing services. Those changes don’t feel dramatic in the moment, but over a year they make a real difference.

This is where dealing with debt becomes practical rather than emotional. Small, boring admin jobs often deliver the biggest wins.

Free Debt Help and Advice in the UK

If you’re dealing with debt and it feels unmanageable, you do not have to figure this out on your own. Free, independent debt advice is available in the UK, and it’s often far more helpful than people expect.

These organisations are not there to judge you or push you into drastic decisions. Their role is to help you understand your options, prioritise debts correctly, and deal with creditors in a structured way. In many cases, they can also help negotiate payment plans, interest freezes, or breathing space while you get things under control.

One of the best-known organisations is StepChange Debt Charity. They offer free, confidential advice and can help you create a realistic plan based on your actual income and outgoings. They also explain formal debt solutions clearly, without pressure.

Citizens Advice is another strong starting point, especially if your situation involves housing, benefits, or wider financial issues alongside debt. They can help you understand your rights and next steps.

You can also contact National Debtline, which provides free advice by phone and online, including guidance on dealing with creditors, prioritising debts, and understanding legal options.

For general guidance and budgeting support, MoneyHelper offers tools and explanations to help you better understand your finances and options.

If debt is affecting your mental health, it’s also important to acknowledge that. Financial stress can take a serious toll, and support is available. Organisations like Mind offer help and resources for managing the mental impact of money worries.

Reaching out for support isn’t a failure. In many cases, it’s the step that stops things from getting worse and helps you regain control faster than trying to deal with everything alone.

Cashback and Reducing Everyday Costs

Cashback alone won’t fix debt, but making sure I earn cashback on as many of the purchases I make as possible really helps generate additional incoming cash, which helps reduce pressure. I also regularly use supermarket cashback apps such as Shopmium, CheckoutSmart, and GreenJinn. I use them because I’m buying food anyway, and any money back helps stretch the budget further.

Food choices also change when debt increases. Since our debt rose again in 2025 due to a combination of a holiday, Christmas overspending, and necessary DIY projects, we’ve had to tighten things up. That means fewer days out, minimal socialising, and being far more intentional about food spending. January, in particular, is about using what’s already in the fridge and freezer, even if meals are less exciting than we’d like.

Mistakes Still Happen

I’m not writing this as someone who has everything perfectly under control.

We added to our debt for a holiday in 2025, and while the break was needed and enjoyable, we’re still paying for it now. Income didn’t land as expected, interest will likely follow, and that decision has had a knock-on effect for months. Christmas was also far more expensive than planned, which added further pressure.

That’s the reality. Progress with debt is rarely a straight line, and even people who know better still make decisions they later regret.

Advice I Don’t Agree With

Some debt advice sounds good online but doesn’t work in real life. No-spend months are unrealistic for most people. Low-spend periods can work, but pretending you can spend nothing for a month often leads to burnout and rebound spending.

Casually suggesting bankruptcy or IVAs is also irresponsible. These are serious decisions with long-term consequences and should never be treated as an easy fix or a shortcut.

The Real Goal When Dealing With Debt

The goal isn’t perfection or instant freedom from debt. The real goal is control.

Once you understand your numbers, prioritise correctly, and make realistic changes, the stress starts to ease. Progress becomes possible, even if it’s slow. Debt does not define you, but avoiding it will make it define your life.

If you’re dealing with debt right now, start with one step. Write everything down. Separate priority debts from the rest. Track your spending honestly and make one change that frees up cash.

You don’t need to fix everything today. You just need to stop avoiding it and start dealing with it properly.