5 Tips to Get Out of Debt

While credit can be useful, having debt can be stressful. Struggling to keep up with repayments can feel very much like walking the wrong way up an escalator. No matter how hard you try, it can lead to a feeling of getting nowhere fast.

But getting out of debt doesn’t have to be too hard. And taking control is the first step. We’ve outlined five simple ways to deal with your debts, before it becomes a bigger problem.

Back to Black

Knowledge is power, so getting out of the red and into a more viable financial position, means being really honest with yourself about your level of debt. It’s vital to sit down and work out how much you owe, and to whom. Remember that there are two different kinds of debt;

Priority Debts

These are debts that if left unpaid would risk you losing your house or criminalised. These would include mortgage or rent payments, TV Licence payments, secured loans, court fines, and council tax.

Non-Priority debts include utility bill payments, credit card debts, overdrafts, benefit overpayments.

It’s recommended that you always pay your priority debts first.


Once you have sorted out how much you owe, and to whom, you need to examine your income and outgoings. By analysing how much spare cash you have available after you have bought basics such as food, you can prioritise money left over for paying off your debts. If there is none left, concentrate on paying your priority debts first.

Maximise your Income

If possible, find ways to increase your earnings. If you have a spare room, consider taking on a lodger, (you are allowed a tax free income of £4, 250 per year from a lodger). Or consider extra part time work you could take on at weekends.

Credit Card Debt

Remember that interest rates on non-priority debts will continue to rack up, so if you have credit card debt consider applying for a 0% balance transfer card. If this isn’t possible due to bad credit, it’s advisable to write to credit card companies and explain that you are currently struggling. Include your budget sheet showing how much you are earning and what your essential outgoings are, and ask them if they would consider freezing the interest and accepting whatever you can afford in re-payments. Before you do this though, remember that this will be a big hit to your credit rating, and you will have to cut up your credit card.

Debt Consolidation Loans

Beware consolidating your existing debts. Although debt consolidation companies make things easier in terms of combining all your debts into one monthly re-payment, some companies will secure the debt against your home. APR rates can also be higher than your existing debts, so always check that you would actually be repaying less.

Ask the Experts

If you really don’t know where to start, and feel overwhelmed by debt, there are some helpful organisations available. Try the CCCS free debt remedy service at www.cccs.co.uk

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