If you are behind with paying off unsecured debt, you could ask your creditors if they would be willing to accept smaller repayments until your financial circumstances improve.

Once you have factored in your monthly income, household expenditure, and outstanding debt, you will be able to figure out what kind of payment you can, for the time being, afford to make on a regular basis to each of your creditors.

If a creditor rejects your offer of reduced payment, you can nonetheless proceed to pay this amount, as it should still be accepted.

Unfortunately, making monthly payments below the threshold requested by the creditor will hurt your credit rating, making it harder for you to obtain further credit. 

Because of this, you might be better off taking out another debt relief option, such as our IVAs. With an IVA, you only pay one monthly payment towards your debts - at the end of the IVA period the rest of the debt is wiped off, with no additional interest charged. The IVA will also affect your credit rating, however, the fixed time frame may allow you to start taking steps to repair your rating once the IVA is complete.

How much equity is there in your home? The answer to that question will depend on your home’s worth as well as how much you owe in mortgage repayments.

If you are of retirement age, releasing equity in your home can result in money you would be able to use as a lump sum payment on debt. You can choose from the following equity release plans: 

What if there is little chance of you paying off your debts in the foreseeable future? You might have to mull the option of bankruptcy, a form of insolvency that would place certain restrictions on you for a specific duration but ultimately enable you to write off debt.

Nonetheless, bankruptcy can have severe consequences, as it would typically entail assets you own — like your house — being sold to clear your debts. Once you have been discharged from your bankruptcy status, you will be free of nearly all your unsecured debts. Certain debts cannot be included, such as child maintenance arrears, student loans and court fines.

Before applying for bankruptcy, due to the potential consequences, you should consider alternative debt relief measures, such as striking informal agreements with creditors. It would also be worthwhile for you to educate yourself on what debts can and can’t be included in a bankruptcy order, to make sure it is appropriate for you.

For example, while bankruptcy can rid you of credit card debt, one of the most common kinds of unsecured debt, you would need to find a different strategy for dealing with student loan debt.

You might be unable to pay anything towards your debts. This could be because you are permanently incapable of working or have taken out bad loans in a fruitless attempt to rein in your debt level. In instances like these, creditors might be willing to write off debt on request.

Still, a creditor is likely to only agree to write off debt for you in special circumstances — and you would very likely need to provide evidence of these, such as with medical documentation.

On the more positive side, a creditor may be content to partially write off a debt on the condition that you agree to pay off the rest in a lump sum or monthly instalments.

When trying to write off debt, it’s important to get as much help as possible by educating yourself on the situation. Being in debt can seem like a scary challenge, but help is available to you. Before making a decision on your next steps, it would be wise for you to heed a wealth of debt advice.

That way, you can be confident that the debt relief strategy you settle on will be a well-informed one. Detailed below are numerous reliable sources of debt advice. 

One of the key things to consider is to try and avoid using credit for purchases, as this is one of the most common ways that people find themselves in debt.

With the advent of modern technology, credit purchases have become increasingly popular, with many people now choosing to finance their cars and other purchases, instead of buying them outright. Credit cards are now used often to buy things, with many shops and catalogues now offering credit options too.

Whilst buying on credit can seem like an easy idea at first, it can be hard to pay the money back if you don’t have it, particularly with the interest charges that are often added on. If in doubt, the best option is to try and avoid using credit - particularly if you don’t have the funds to be able to pay for the item in full at the time of purchase. 

If you’re already in debt, you may find it hard to take out extra credit. If you find that you are able to still use credit, the interest charges may increase, or your credit score may take a further hit. 

Because of this, it’s a good idea to stop using credit once you get into debt, to help mitigate the risk of increasing your debt in the future.

The independent organisation of Citizens Advice has a mission of assisting people with various problems — including those of legal, consumer, and housing categories. Citizens Advice also boasts rich expertise in debt management, including the following subjects: 

The Citizens Advice website has articles about all of these debt management subjects — and can also ease your efforts to deal with council tax arrears, mortgage arrears, court fines, and other urgent debts.

They’re a fantastic resource if you’re looking for advice on any subject, however you may still need to take out a debt relief option to deal with the debts themselves. 

Once you’ve had a look through the advice available to you, give our friendly team a call and we’ll be happy to go over the future steps to becoming debt-free!

Residents of England and Wales can also consider applying for Breathing Space.

Under the scheme, you can have a certain level of protection against your creditors for up to 60 days — during which time, you will be required to continue making debt repayments. You will, however, be able to temporarily prevent: 

If you are being treated for a mental health crisis, the above protection can last for as long as the treatment as well as a further 30 days.

The good thing about taking out Breathing Space is that it gives you time to consider your options and create a plan of action towards tackling your debts. 

During this time, you can choose a debt management option (for example, an IVA), giving you peace of mind and more power over your debts.

A debt adviser — otherwise known as a money adviser, financial adviser, or debt counsellor — has the responsibility of helping people who are facing difficulties in paying off debt. They work for FCA registered organisations, which includes charitable and private organisations, and can provide advice on all solutions for dealing with your debts

This kind of professional can assist you in not only exploring debt repayment methods but also handling adverse consequences of being in debt. A debt adviser can: 

If you have your debt written off in full, it will be marked as satisfied or settled on your credit history. Nevertheless, if you have missed any payments, the account has been defaulted prior to you paying the balance off, or you paid less than what was agreed, this will be recorded on your file for a minimum of six years. 

In some instances, creditors could be willing to write off some of the debt you owe should you offer to pay the remaining amount over a few months or as a lump sum. This is what is known as a final and full settlement. This will be marked on your credit file as a partial payment. 

There is no guarantee that your creditors will be willing to accept your offer. The chances of them agreeing to this will depend on the amount of money you are able to pay to them. Nevertheless, you have a better chance of this being accepted than your creditors simply agreeing to write off your entire balance.