How to Get Out of Debt: A Step-by-Step Plan

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Key takeaways

Start by writing down every debt, balance, interest rate and minimum payment
Build a realistic budget, then pay priority debts first
Use avalanche or snowball to pay down the rest, and roll cleared payments forward
Cut interest and bills and find extra income, but avoid risky new borrowing
If you cannot cover your minimums, get free advice now

Getting out of debt is rarely about one big move. It is a series of clear, realistic steps that you repeat until the balance reaches zero. This guide sets out a 12-month plan you can follow in the UK, starting from the day you decide to take control. It covers finding out exactly what you owe, building a budget, deciding which debts come first, choosing a payoff method, finding extra money and knowing when to bring in free help. You do not need to be good with numbers, only willing to keep going.

Month 1: Face the full picture

The first job is simply to find out what you owe. Open your post, log into your accounts and write down every debt.

Creditor and type of debt, such as credit card, loan, overdraft, catalogue or arrears
Balance owed
Interest rate (APR)
Minimum monthly payment
Whether it is a priority debt

Check your credit report to catch accounts you may have forgotten. See how to check your credit report. Add up the total. It may feel uncomfortable, but you cannot plan around something you cannot see.

Month 1: Build a budget that tells the truth

List your take-home income and every outgoing for a typical month. Use your bank statements, not memory. Split spending into essentials and non-essentials. Our guide to making a debt budget and the budget planner walk you through it. The figure you are after is what is left after essentials, which is the money available for debt repayment.

Month 2: Sort priority debts first

Priority debts are those with the most serious consequences, such as rent or mortgage, council tax, energy and court fines. Make sure these are paid in full and on time before anything else. If you are in arrears on any, agree a repayment plan. See priority and non-priority debts.

Month 2: Decide whether you can pay in full

Compare the money available each month with your total debt and minimum payments.

If you cannot cover your minimums, do not wait. Speak to StepChange, National Debtline or Citizens Advice. See free debt advice in the UK.

Situation	Likely route
Spare money after minimums	Pay down faster using the steps below
Just covering minimums	Cut costs, raise income and consider a lower-interest option
Not covering minimums	Get free advice now: you may need a plan or formal solution

Months 3 to 4: Choose a payoff method

Pay the minimum on every debt, then put all extra money on one target.

Avalanche: target the highest interest rate first. It usually saves the most money.
Snowball: target the smallest balance first. It builds momentum.

Use the debt repayment calculator to compare. When a debt is cleared, roll its payment onto the next one. See how to pay off debt faster for the detail.

Months 3 to 4: Lower the cost of borrowing

If your credit record allows, look for ways to cut interest, but take care.

A 0% balance transfer card can pause interest for a time. See balance transfers explained.
A consolidation loan can help if the total cost falls. See should you take a loan to pay off debt.
Ask creditors for lower rates or a payment plan. See how to deal with creditors.

Months 4 to 6: Find extra money

Cut bills: Review energy, broadband, mobile, insurance and subscriptions. See how to cut household bills.
Raise income: Extra hours, a side job, selling items you no longer use, or claiming benefits and discounts you missed.
Stop new spending on credit. Consider removing saved card details and leaving cards at home.

Every extra pound you put on the target debt reduces interest and shortens the plan.

Months 6 to 9: Build a small safety net

It sounds backwards to save when you have debt, but a small emergency fund stops the next surprise bill from going on a card. Aim for a modest starting buffer, then build it as your debts fall. See how to build an emergency fund.

Months 9 to 12: Review and adjust

Check your progress against the plan. Update balances, recalculate your timetable and celebrate milestones. If your income has changed, rework your budget. If you find the plan is not working, change it rather than giving up. A debt management plan or formal solution may be the right step. See IVA vs DMP vs DRO vs bankruptcy.

Habits that keep you out of debt

Pay yourself first by saving automatically each payday
Use a budget every month
Keep credit cards for planned spending you can clear in full
Check your credit report once or twice a year
Talk to a free adviser at the first sign of trouble

When to get help immediately

Get free advice straight away if you are missing payments, receiving letters from bailiffs or courts, borrowing to pay existing debts or feeling overwhelmed. See urgent debt help.

A worked example

Emma owes £3,000 on one card at 22% APR, £2,000 on another at 18% and £1,500 on a loan at 9%, with £220 a month spare after minimums. She uses the avalanche method: all the spare money goes on the 22% card until it is cleared, and then onto the 18% card, while she keeps paying the minimum on the loan. Her calculator shows she will be debt-free in a little over two years. After clearing the first card, she rolls its payment onto the next. When a car repair hits, her small emergency fund covers it, so no card is touched. The plan is not exciting, but it works.

Staying motivated

Track your progress on a chart or in a spreadsheet. Celebrate milestones with something free. Tell a trusted friend, who can help you stay accountable. If you slip, do not give up: adjust the plan and carry on. The aim is steady progress, not perfection.

Frequently asked questions

What is the fastest way to get out of debt?

Cut the cost of borrowing, free up as much money as you can and concentrate extra payments on one target at a time. Free advice can help if you are struggling.

Should I save or pay off debt first?

Build a small emergency fund so that surprises do not go on credit, then focus on expensive debt. Balance the two.

How long does it take to get out of debt?

It depends on how much you owe, the interest and what you can pay. A calculator shows your timetable.

What if I can't afford my minimum payments?

Contact a free adviser and your creditors straight away. A plan or formal solution may be needed.

Sources and further reading

Dealing with debt — MoneyHelper
Budget planner — MoneyHelper
Debt and money — Citizens Advice

This page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.

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MoneyBrink Editorial Team — Editorial team

The MoneyBrink Editorial Team researches, writes and reviews every guide on this site. We work from official UK sources such as GOV.UK, the Financial Conduct Authority, MoneyHelper and the Money and Pensions Service, explain things in plain English, and update articles when the rules change. We do not sell financial products and we do not give personal advice.

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