Last verified 5 Jun 2026 · Source StepChange + Citizens Advice + FCA + Insolvency Service
If a stack of debt letters has arrived together, the priority is rarely the loudest creditor. UK law splits debts into two groups: those that can take your home, your liberty or your essential services — and everything else. Get the order right and the panic shrinks fast.
The honest read
Most debt panic ends once you list them, sort them, and call StepChange.
Free regulated debt advice exists in the UK for exactly this moment. It is genuinely free, confidential, FCA-regulated, and used by hundreds of thousands of people every year. StepChange, National Debtline, Citizens Advice and PayPlan can stop creditor contact for you within hours.
The single best thing you can do today is list every debt with the amount and the creditor, sort them into the two groups below, and either ring StepChange (0800 138 1111) or use their online debt advice tool. Everything else flows from that.
If today feels too heavy: Samaritans — 116 123, free, 24/7. Debt and suicide risk are linked. Please talk to someone tonight. You are not alone, and there is a way out of every UK debt situation.
Priority vs non-priority debts.
This is the legal distinction every UK debt adviser uses. The first column is what to pay first, even at the expense of the second. Aggressive letters from non-priority creditors do not move them up the list.
Pay first
Priority debts
These can take your home, your liberty, your services or your goods. Deal with them before anything else.
Rent arrears. Risk: eviction proceedings. Section 8 / Section 21 in England & Wales.
Mortgage arrears or secured loan. Risk: repossession.
Council tax arrears. Risk: summons → liability order → bailiffs → in rare cases committal to prison.
Gas and electricity arrears. Risk: prepayment meter forced fit (FCA-restricted but legal) or disconnection.
Water arrears. Risk: court action (cannot be disconnected for unpaid water in England since 1999).
HMRC tax debts. Risk: enforcement agents, bank account freeze, court.
Court fines (Magistrates). Risk: bailiffs, deductions from wages or benefits, very rarely committal.
TV licence arrears (current rules). Risk: prosecution and fine up to £1,000 (criminal conviction).
Benefits and tax credit overpayments. Risk: deductions from ongoing benefit / wages.
Negotiate second
Non-priority debts
Aggressive letters, daily texts, doorstep visits. But the worst they can do is take you to County Court for a CCJ. They cannot take your home or send you to prison.
Credit cards and store cards.
Personal loans (unsecured).
Overdrafts.
Payday loans.
Catalogue accounts.
Buy Now Pay Later (Klarna, Clearpay, Laybuy).
Debts sold to a debt-purchaser (Lowell, Cabot, PRA Group, Intrum, Arrow Global).
Money owed to family or friends.
Doorstep / home credit lenders.
Old phone, broadband, gym contracts.
Quick sort
Tap every type of debt you have. We’ll order them for you.
Multi-select. Nothing is saved. The order on the right is the order most UK debt advisers would give you.
Your prioritised list
This is a rough sort. Get free advice from StepChange or National Debtline before making a payment plan — they will negotiate with the non-priority creditors for you, freeze interest, and help you afford the priority debts.
The free legal pause — Breathing Space.
Officially the Debt Respite Scheme. A 60-day legal pause on most UK debts. Interest stops, fees stop, enforcement stops, creditors must stop chasing. Almost nobody knows this exists.
What Breathing Space gives you
60 days (standard) during which most creditors cannot contact you about the debt, add interest, or take enforcement action.
Covers most consumer debts: credit cards, loans, overdrafts, council tax arrears, utility arrears, payday loans, mortgage arrears, store cards, BNPL, debt purchasers.
You must keep paying ongoing essentials — current rent, current mortgage interest, current council tax, current utilities — but no arrears repayment is required during the pause.
A Mental Health Breathing Space lasts the duration of mental-health crisis treatment plus 30 days, with no 60-day cap. Requires evidence from an Approved Mental Health Professional.
How to apply: You can’t apply directly. You go through an FCA-regulated debt adviser who applies for you on the GOV.UK service. StepChange, National Debtline, Citizens Advice and PayPlan can all do this. It is free.
What changes the day Breathing Space starts: Most creditors get an automatic notification via the Insolvency Service. The interest counter freezes. The letters stop. The phone calls stop. The pressure drops.
Letter — request reduced payments on a non-priority debt.
For credit cards, loans, overdrafts, catalogues. Asks for interest and fees to be frozen, payments reduced to what you can afford. Under FCA CONC 7 rules, regulated lenders must consider this and respond fairly. Doesn’t replace getting free advice, but is a strong first move while you wait for an appointment.
Tip: Send by post (free at the Post Office for proof) or by their formal customer-service email if listed. Keep a copy. If they refuse or don’t respond within 8 weeks, complain to the Financial Ombudsman Service — free, decisions are binding on the lender.
The 6-year rule — is the debt statute-barred?
Under the Limitation Act 1980, most simple-contract debts (credit cards, loans, overdrafts) become statute-barred 6 years after they were last either acknowledged in writing or paid. Statute-barred doesn’t extinguish the debt — the creditor can still ask — but they cannot get a CCJ against you for it.
Three quick questions
Has it been at least 6 years since the original creditor said the debt was overdue (the “cause of action” date)?
In that 6-year period, have you made no payment — not even £1?
In that 6-year period, have you not written, emailed or signed anything acknowledging that you owe the debt?
If all three are yes, the debt is likely statute-barred. Do not pay it and do not acknowledge it in writing — either action restarts the clock. If the creditor still pursues you, send a short letter stating you believe the debt is statute-barred under the Limitation Act 1980 and that you will not be making any payment or acknowledgement. National Debtline has free template wording.
Exceptions: Mortgage shortfalls are 12 years on the capital under Section 20 of the Limitation Act. HMRC tax debts and court fines are not affected by the 6-year rule in the same way. Council tax is 6 years from the date the liability order was obtained.
If the maths don’t work — formal options.
When payments to creditors cannot reasonably be made within a sensible time. Get free regulated advice before using any of these — fee-charging firms aggressively advertise IVAs because they pay them commission. The free advisers can set up the same arrangements with no commission.
For debts under £50kDebt Relief Order (DRO)
One-off fee: £90.
Eligibility: total qualifying debt ≤ £50,000; spare income after essentials ≤ £75/month; assets ≤ £2,000; vehicle worth ≤ £4,000; not a homeowner.
After 12 months, qualifying debts are written off. Applied for through an Approved Intermediary (free, via StepChange / Citizens Advice / others).
For surplus incomeIVA (Individual Voluntary Arrangement)
Length: typically 5–6 years.
You make affordable monthly payments to a licensed Insolvency Practitioner who distributes funds to creditors. Remaining qualifying debt is written off at the end.
Legally binding once 75% (by debt value) of creditors agree. Strongly protects assets including the family home. Significant impact on credit file.
When nothing else fitsBankruptcy
Fee: £680 (waiver possible on low income).
Most debts written off. You’re discharged usually after 12 months. Major impact on credit file for 6 years. Property and certain assets may be sold by the Trustee. Some professions restricted while undischarged.
Apply online via GOV.UK adjudicator. Always take free advice first.
Scotland: the equivalents are the Debt Arrangement Scheme (DAS), Protected Trust Deeds, and Sequestration. Free advice: Citizens Advice Scotland 0800 028 1456. Northern Ireland: similar UK schemes apply, advice via Advice NI 0800 028 1881.
Free, regulated UK debt advice.
All of these are FCA-regulated, free, confidential, and have helped millions of UK households. They will negotiate with your creditors, apply for Breathing Space on your behalf, and help with formal insolvency where appropriate.
Fee-charging debt management companies. Adverts saying “write off up to 90% of debt” or “reduce your monthly payments by 80%” on social media or Google ads. Many are commercial firms that charge a fee for setting up an IVA you could have set up for free via StepChange / PayPlan.
“Government-backed debt write-off schemes”. No such scheme exists in those words. The genuine schemes are DRO / IVA / bankruptcy / Breathing Space — all named, all on GOV.UK, all available through free advisers.
Payday loans to pay other debts. Almost always makes things worse within 30 days. APRs commonly above 1,000%.
Ignoring court papers (Form N1 / claim form). 14 days to respond or you get a default County Court Judgment (CCJ) almost automatically. Never ignore court papers.
Doorstep collection threats from debt-purchasers. Lowell, Cabot, PRA Group, Intrum, Arrow Global have no enforcement powers. They cannot enter your home. They cannot take goods. They can only ask, send letters and (if they choose) issue a County Court claim.
Paying the loudest creditor. The one writing in red ink with capital letters is usually a non-priority creditor trying to push themselves up the list. Don’t let letter-style change the legal priority.
Bailiffs / enforcement agents (different from debt-collectors): they have real legal powers but only for specific debts (council tax with a liability order, magistrates’ court fines, HMRC, CCJs the creditor has escalated). They cannot break in. They cannot enter through a closed door for most debts. They cannot enter at night. Citizens Advice has a calm step-by-step guide if a bailiff visits.
Sorted is not a regulated debt adviser. The Quick Sort is for orientation only. For binding regulated advice on a specific case, contact one of the free services above — they are the people who actually negotiate with your creditors.