In debt? Here are your options

Last Modified 16th of February 2021

At some stage in our lives, most of us are going to come up against debt – and if you’re there now, it can be easy to feel as though there’s no way out.

However, there is. In fact, there are several solutions that could be available to you. Let’s take a quick look at some of the options available to you. Please note at this stage that we’re not going to take a complete/comprehensive look at your options – you should speak to a professional debt adviser if you’d like to do this.

Debt consolidation loans

A debt consolidation loan is a loan you can use to repay all your existing unsecured debts in one go. This will leave you with just one debt to just one creditor – which can help to make your finances much easier to keep track of, as you’ll only have one payment to make each month.

A debt consolidation loan can also help to reduce the amount you’re required to spend on your debt on a monthly basis, if you arrange to repay the loan over a longer time frame. However, by doing this, you’ll be paying interest for longer as well – so may pay more in the long run.

Debt consolidation loans are only really suitable for people who can consolidate all their existing unsecured debts and who have a steady/reliable income.

Debt management plans

A debt management plan may be the right option for you if you’re struggling to afford your debt payments as they stand, but you would be able to repay your debts within a reasonable period of time (under different terms).

You can arrange a debt management plan on your own – but this can be time consuming and stressful, so you may want to ask a professional debt management company to do it for you. They can talk to your unsecured lenders on your behalf, asking them to agree to changes to your original repayment plans – in particular, lower monthly payments. Your lenders don’t have to agree to this, but they may well do so if it looks like the best way for you to repay the money you owe.

Your creditors may also agree to freeze/reduce the interest (and other charges) on your debts. If they don’t agree to do this, though, your debt management plan could cost you more in interest in the long run, because you’ll be repaying your debts at a slower rate and will still be paying interest (for longer). Also note that repaying your debts in a different manner than you originally agreed to can show up on your credit report, which can put other potential lenders off lending you money.


If you’re declared bankrupt, the bankruptcy will stay on your file for one year – regardless of how much you still owe. Your property and assets may be sold, and the money raised from this will pay for the costs of your bankruptcy (court fees and necessary expenses) and repaying your debts.

You can only be discharged from bankruptcy by the court. Bear in mind that bankruptcy is a complex subject – and that this is just a brief summary. For more information, talk to an expert.