How to pay off debts

How can I reduce my outstanding debt?

The first thing to do is make a budget.

This will help you understand:

• How much money you have coming in each month
• How much money you have going out each month
• If you can make any savings anywhere
• What you can afford to pay towards your debts

You need debt advice if you cannot afford to pay more than you do now.

We can help you find out which debt solutions are best for you.

Can I negotiate debt?

You may be able to make lower payments if the people you owe understand what you can afford.

They may:

• Let you pay through an agreement like a debt management plan
• Agree to give you breathing space
• Give you a payment holiday
  
  • This is a temporary arrangement
  • They may stop interest and charges for a short time

You can also offer a settlement to the people you owe:

• This includes partial settlements
• It means the people you owe accept a percentage of what you owe
• They do this if it is not likely you can repay the full amount

What happens if you cannot pay a debt?

Keep in touch with the people you owe and let them know if you find it hard to make payments.

Send them:

• A letter explaining why you cannot pay what you agreed
• A statement of your income and spending
  
  • This shows what you have left after essential bills

They may:

• Agree new payment terms or
• Pause debt collection for a while

You need to prioritise which bills to pay first if you cannot keep up with all your payments.

Find out more about which debts to pay first.

Are you having problems making payments to debts?

Contact us for advice if you are:

• Struggling to make payments towards debts
• Making reduced payments

This may be a sign that you need debt advice.