Best ways to pay off your debts – England and Wales

Find out about the different ways to deal with debts if you are falling behind with day-to-day bills, loan and credit card repayments or other financial commitments, like your rent or mortgage. Then get some free debt advice before you make a decision.

Debt Management Plan (DMP)

  • suitable if you have non-priority debts like credit or store cards, overdrafts and personal loans
  • allows you to pay back your debts at a rate you can afford
  • your DMP provider will help you work out an affordable payment and talk to your creditors
  • you make one monthly payment to the DMP provider

Find out more about Debt Management Plans.

Debt Relief Order (DRO)

  • suitable if you are on a low income with very few assets
  • freezes debt for a year then writes it off completely if your circumstances haven’t changed

Find out more about Debt Relief Orders.

Individual Voluntary Arrangement (IVA)

  • allows you to pay back what you can afford
  • lasts a set amount of time (usually 5 or 6 years)
  • anything you haven’t paid off by the end is written off
  • is a legally binding agreement – this means once you’ve signed it, neither you nor your creditors can back out of it

Find out more about IVAs.


  • allows you to make a fresh start
  • writes off all debts you can prove you owe
  • if you have any assets, they will be taken and used to pay off your debts

Find out more about bankruptcy.

Offer in full or final settlement

If you have a lump sum that would cover part of your debts, you could ask your creditors whether they would accept a part payment and allow you to write the rest off.

Alternatively, they may allow you to make monthly payments for an agreed period after which the balance is written off.

Writing off your debts

  • suitable in exceptional circumstances if you have no available income, savings or assets
  • you must be able to show your creditors that your circumstances are unlikely to improve in future (for example, if you are severely ill)

Talk to a free debt adviser to find out if this solution could be suitable for you.

Administration Order

You might be able to apply to County Court for an Administration Order if you:

  • have at least two debts – one debt must be a County Court Judgment or Higher Court Judgment against you
  • owe under £5,000 in total
  • can afford to make regular payments towards your debts

You agree to make regular monthly payments from your income to the court for the full amount you owe. The court then distributes the money to the people you owe money to – your creditors.

Find out more about Administration Orders.

Get free debt advice

“We were so ashamed of our debt problems that we avoided telling people. Trying to live life normally and pretend that everything was ok was very difficult.”

Hayley – who runs the Disease Called Debt website and cleared debts of £41,000.

It’s always best to talk things through with an experienced debt adviser before you decide how you’re going to pay off debts.

There are many ways to clear your debts and some are more well known than others. The one that is best for you will depend on your personal circumstances.

A free debt adviser can help you make the right decisions so that most of your money will go to paying off your debts – meaning you could be debt free sooner than you thought.

A debt adviser will:

  • treat everything you say in confidence
  • never judge you or make you feel bad about your situation
  • always be happy to talk to you, however small or big your problem is
  • suggest ways of dealing with debts that you might not know about
  • check you have applied for all the benefits and entitlements available to you
  • give advice about better ways of managing your money

“It is a scary thing to pick up the phone and say you have debt problems, but most people feel a huge sense of relief when they do.”

Debt Camelopens in new window – personal finance and debt blogger.

You may only need to have one conversation with an experienced debt adviser to make sure that your plan to manage or clear your debts is the right one for you.

If you need more support or don’t know where to start, you’re not alone. Nearly half of people in debt told us they aren’t sure about the best way to deal with their debts, and that is where a debt adviser can really help you.

More than eight out of ten people who have got debt advice tell us they feel less stressed or anxious and more in control of their life again.

“Debt advice just changed the way I dealt with it. Getting rid of the shame. I am only sorry it took me so long.”

A debt advice client.

The people that let debts build up before they seek advice often find things have spiralled out of control, their cards are maxed out, no-one else will lend to them and it takes much longer to pay back what they owe.

You can contact an adviser in a way that’s best for you – online, over the phone or face-to-face.

So join one of the hundreds of thousands of people we help each year and take the first step to being debt free.