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How to get out of debt

If you’re reading this it's likely there's a question keeping you awake at night: How can I get out of debt?

StepChange Debt Charity want to help people recognise the danger signs of a debt problem and understand how to get free debt help. Start improving your situation straight away with their 5-step plan to a debt-free future.

Step 1: Face the problem

From experience they know that a large proportion of people wait a year or more to get debt help. If you’re reading up about ‘how to get out of debt’ you've taken the first step in getting your finances back on track. The golden nugget of advice is this: free, impartial debt help is the answer. Extending your overdraft, taking out a payday loan or extending your credit card limit isn't. If you’re in debt applying for extra credit of any kind won’t help.

Step 2: Draw up a budget

A personal budget is important because you can only ever be made to pay back an unsecured debt (such as a credit card) at a rate you can afford. You should be paying them off with your ‘disposable income’. This is the money you have left once you've paid priorities like rent, mortgage, household bills, food and living costs. Seeing how much money you have spare after accounting for these things is important. We’d recommend that you read StepChange Debt Charity’s article on how to create a budget, and use their online debt advice tool StepChange Debt Remedy to help you.

Step 3: Take stock of your debts

It’s human nature to put off things you don’t want to do. You might have a stack of unopened reminder letters, or you might have moved address and not informed your creditors. Don’t beat yourself up about it; it’s in the past. But knowing now how much you owe now is crucial in sorting out the problem. Looking at your credit file is the clearest way to take stock of your debts. Noddle offers access to your credit file free of charge. It will show who you owe money to, your balances and if you have any county court judgments (CCJs). Noddle is free but they’ll probably show you adverts for credit cards – it could go without saying, but ignore them! Sometimes the credit search can’t locate you. If this is the case don’t panic, but instead, follow our next step.

Step 4: Speak to your creditors

It can be nerve-wracking to contact a company you owe money to, but remember:

  • Credit companies are businesses not Gods
  • People who work in their collection departments are simply doing their job
  • You shouldn’t be forced to pay more than you can afford towards a debt
Armed with those three pieces of information you can contact the creditors with more confidence. Inform them that you know you owe them money and that you've fallen into arrears, but you’re taking steps to rectify it. Ask them if they can temporarily freeze any interest or charges while you seek advice. Then move onto step 5!

Step 5: Get a debt solution

So you want to get out of debt. You've drawn up a list of your outgoings. You’re armed with who you owe money to and how much. Now it’s about seeing which debt solution is right for you. A free debt management plan (DMP) is one way of repaying your debts; an individual voluntary arrangement (IVA) or bankruptcy are others. The best way to ensure you get what’s right for you is to get impartial advice from a debt charity. StepChange Debt Charity offer their debt advice online through their StepChange Debt Remedy tool. Enter your budget information and it’ll instantly recommend the best solution for you. It’s free, confidential and easy to use. Or if you’d prefer you can contact StepChange to chat to an advisor over the phone, have an online chat or request a call back.

The key points to remember:

  • No debt problem is impossible – facing it can often be the biggest hurdle
  • If you’re struggling, don't apply for more credit – it won’t help
  • Creditors cannot force you pay more than you can afford – you just need to work out how much that is
  • Don’t be tempted to pay for debt help – free, impartial advice is always best
  • You’re not alone – debt charities are here to support you!


Overdales and Overdales Solicitors are trading styles of Overdales Legal Limited which is a company registered in England and Wales under Company Reg No. 07407310. Overdales Legal Limited is authorised and regulated by the Solicitors Regulation Authority under SRA No. 806769. Overdales Legal Limited is authorised and regulated by the Financial Conduct Authority in relation to consumer debt collection under registered number 691793. Registered office: Ellington House, 9 Savannah Way, Leeds Valley Park, Leeds, LS10 1AB.