How can I cut my debt and still pay for essentials?

16 April 2015


I'm in terrible debt and just cannot seem to get back on track. I earn £2,000 a month but £800 of that goes on child maintenance, while I pay £1,150 in rent on a house I no longer live in but have to pay for until July. I also have £8,000 of credit card debt and am £2,000 overdrawn. How can I get this sorted?


The key here is to prioritise your commitments. The costs for the house you're living in, child maintenance and grocery shopping are three examples of priority spending.

Paying rent on a property you don't live in, on the other hand, is definitely not and trying to maintain this will only further inflate your credit card and overdraft debts.

I suggest you start by contacting the landlord of the property and making them aware of your financial position. Drawing up a list of your income and essential expenses is the best way to do this. Offer them affordable payments based on what you have left over after paying everything else.

You should also ask whether any other tenants could be sought to take over the remainder of your existing tenancy.

If you're struggling to deal with your debts even after doing this, there may be ways to simplify matters.

Free debt-management plans involve making a single monthly payment to someone who will then deal with all your creditors on your behalf.

Individual Voluntary Arrangements allow you to pay off a set percentage of the debt over a fixed period – usually five years.

As a last resort, bankruptcy allows you to write off the debts altogether and start afresh but there are numerous side effects to consider and all of these steps will have some sort of bearing on your credit rating. You also have to pay to go bankrupt.

For more guidance and information, seek free debt advice from an independent charity such as National Debtline to discuss future steps with a trained adviser.

Denis Hussey of the National Debtline