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My Power: Money & Debt

Debt Solutions: There Is a Way Out

Debt feels like prison. But the law provides routes to freedom — and most people in debt have far more power than they realise.

Priority vs Non-Priority Debt

The single most important thing to understand about debt is the difference between priority and non-priority debts:

  • Priority debts have serious consequences if unpaid: rent/mortgage (lose your home), council tax (imprisonment), energy bills (disconnection), TV licence (criminal conviction), child maintenance.
  • Non-priority debts have fewer consequences: credit cards, personal loans, catalogues, overdrafts, store cards. Creditors can pursue you through court but cannot imprison you or take your home for these.

Always pay priority debts first. If you can't afford both, stop paying non-priority debts and get free advice immediately.

Your Debt Rights

  • Creditors must treat you fairly — the FCA's Consumer Duty requires forbearance for those in financial difficulty.
  • Breathing Space — 60-day legal protection from enforcement, interest, and charges.
  • Bailiffs cannot force entry to your home for most debts — don't open the door.
  • Statute-barred debts — most debts become unenforceable after 6 years if no payments made and no CCJ obtained.
  • Harassment is illegal — creditors cannot call excessively, threaten, or contact you at antisocial hours.

Formal Debt Solutions

Debt Relief Order (DRO)

For debts under £30,000, assets under £2,000, and surplus income under £75/month. Costs £90. After 12 months, your debts are written off entirely. Applied for through an approved debt adviser (free through StepChange or Citizens Advice).

Individual Voluntary Arrangement

An IVA is a formal agreement with your creditors to pay what you can afford over 5-6 years. You need 75% (by value) of voting creditors to agree. After completion, remaining debt is written off. Use a free provider — never an IVA factory that charges fees.

Bankruptcy

Costs £680 to apply online. Your debts are written off after 12 months. You may lose assets (house, car worth over a set amount) but you keep essential household items. For many people, bankruptcy is the fastest route to a fresh start.

Bailiffs: Know Your Rights

Bailiffs (enforcement agents) have far fewer powers than most people think:

  • On their first visit, they CANNOT force entry for any debt type except criminal fines or tax debts.
  • If you don't open the door, they must leave and try to arrange payment by other means.
  • They CANNOT enter through an open window, break a lock, or push past you.
  • They CANNOT take items that belong to someone else, essential household items, or tools of your trade (up to £1,350).
  • If they've gained "peaceful entry" and taken "controlled goods," they can force entry on subsequent visits — so never let them in.

Breathing Space: Your 60-Day Shield

The Debt Respite Scheme (Breathing Space) is available through a debt adviser and provides 60 days where:

  • All interest and charges are frozen.
  • All enforcement action stops (including bailiffs and court proceedings).
  • Creditors cannot contact you about the debt.

For people in mental health crisis treatment, a Mental Health Breathing Space lasts as long as the treatment plus 30 days.

Essential Resources

Debt Action Checklist

You are not alone. Millions are in the same position. Here's how to take back control.

Take Control of Your Debt
Practical steps to stop the spiral, know your rights, and find a way forward.

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