Dealing with debts
If you have debts, it is important to try and get them under control. We have information about dealing with debts and where to get support.
Make a list of your debts
Making a list of your debts can help you decide what you need to pay first.
Some debts are priority debts. These will have the most serious consequences if you do not pay them back. This could be your rent or mortgage.
Others are non-priority debts. These may have less serious consequences if you do not pay them on time. This could be a bank overdraft.
Examples of priority debts
People or companies you owe money to are called creditors. There are some examples of priority debts.
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Mortgage (secured loan) payments
Your mortgage lender may start a process to take back (repossess) your home. This may happen if you cannot pay your mortgage for a few months.
If you are having difficulty paying your mortgage, it is important to talk to your lender as soon as possible. There are options that your lender must consider to help you manage repayments. These options will depend on your situation. Or you may be able to get financial help from the government. -
Unpaid rent (rent arrears)
If you cannot pay your rent, your landlord might try to make you leave your home (evict you). If you are having difficulty paying your rent, it is important to talk to your landlord as soon as possible. You may be able to get financial help from the government.
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Council tax in England and Wales
If you cannot pay your council tax, your local authority can take money from your pay or benefits. They may also send bailiffs to take the things you own. These are called your possessions.
If you are having difficulty paying your council tax, it is important to talk to your local authority as soon as possible. You may be able to get help with the cost of your council tax if you are on a low income. -
Council tax in Scotland
If you do not pay your council tax, your local authority can take you to court. If you still do not pay, they can take money from your income or benefits. They may also send sheriff officers to take some possessions, such as your car.
If you are having difficulty paying your council tax, it is important to talk to your local authority as soon as possible. You may be able to get help with the cost of your council tax if you are on a low income. -
Rates in Northern Ireland
If you do not pay your rates, the Land and Property Services (LPS) can take you to court. If you still do not pay, they can take money from your pay or bank account. They may also take possessions from your home.
If you are having difficulty paying your rates, it is important to talk to the LPS as soon as possible. You can call them on 0300 200 7801 or text phone 18001 0300 200 7801. You may be able to get help if you are on a low income.
We have more information about help with bills and housing costs. -
Energy bills
If you are having problems paying gas and electricity bills, talk to your supplier as soon as possible. If you tell them you have cancer, they should put your name on a list of customers who need extra support. You might be able to get a grant to help pay your bills or spread the cost of your payments.
If you do not contact your supplier, they may disconnect your gas or electricity. We have more information about managing energy costs. -
Phone bill
If you are having problems paying your phone bill, talk to your provider as soon as possible. They may be able to give you more time to pay your bill. If you do not contact your provider, they may disconnect your phone.
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Fines, maintenance and compensation orders
If these are unpaid, the court may take money from your pay. They may also send bailiffs (or sheriff officers in Scotland) to take possessions from your home. You could also be sent to prison.
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TV licence
If you do not pay your TV licence, you may get a court fine. If you are having problems paying your TV licence, you can call TV Licensing on 0300 790 6113. They may be able to help you with a payment plan.
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Tax and VAT
If you do not pay your taxes, the government can use a debt collection agency to collect the money. They may send bailiffs (or sheriff officers in Scotland) to take possessions from your home. They can also take you to court.
If you are having difficulty paying your taxes, it is important to talk to HM Revenue and Customs (HMRC) as soon as possible. You may be able to get more time to pay your tax bill or pay in instalments. Find out more at GOV.UK. -
Hire purchase or conditional sale agreements
Hire purchase (or conditional sale agreement) is a type of borrowing. You can use it to buy big items such as a car. You pay an agreed amount in instalments. You do not own these items until you have paid for them in full.
If you cannot make the payments, the lender may take back (repossess) these items. If you are having problems with making payments, it is important to get some advice. You can contact StepChange Debt Charity for more information. Or you can contact Citizens Advice in England, Scotland and Wales, or Advice NI in Northern Ireland. -
Parking penalties
If you do not pay a parking penalty on time, the amount can increase. If you still do not pay, you may have to go to court. Your vehicle may also be taken away. If you cannot pay a parking fine, it is important to get some advice.
You can contact StepChange Debt Charity for more information. Or you can contact Citizens Advice in England, Scotland and Wales, or Advice NI in Northern Ireland.
Related pages
Debt collection agencies
Creditors can employ debt collection agencies (debt collectors) to collect debt on their behalf. Or they may sell your debt to these agencies. This means debt collection agencies may contact you about money you owe to someone else.
Collection agencies can also sell your debts to each other. This can be confusing, but it is important to keep track of who each debt is owed to.
Debt collection agencies are not court officials. This means they do not have the same power as bailiffs and cannot take your possessions.
You might feel threatened by some of these agencies. They may be connected to a firm of solicitors and talk about taking court action. But these agencies do not have any more power than the original creditor. They are not allowed to:
- lie to you about their powers
- make an unnecessary amount of phone calls to you – for example, calling several times a day.
If you are not happy with the amount of calls you get from debt collectors, or the way they are talking to you, you can make a complaint. You can call the Citizens Advice Consumer Helpline on 03454 04 05 06 for further information or Advice NI in Northern Ireland. Or visit StepChange Debt Charity.
You may find it useful to make a list of your debts and update it regularly. Amounts can go down if you make regular payments that are large enough. Or, your debt can go up if you make smaller payments. For example, your debt may go up if:
- the payment does not cover
- the increasing (accruing) interest the interest rate increases
- you are charged for late payments.
If you are worried about your debts, it is important to get advice as soon as possible. You can get online advice 24 hours a day at stepchange.org/debtremedy or call the StepChange Debt advice helpline on 0800 138 1111.
County court judgements decrees
Many creditors may threaten court action if you fall behind with payments and are unable to pay the suggested amounts.
If you get a court form, it is important to get advice on how to deal with the claim. We have details of organisations that can help (see below). You will need to fill in a reply form showing all your income and outgoings. We have a budget planner that can help you do this.
In most cases, you will not have to attend a court hearing and it will be dealt with in writing. The court will write to you with their decision. You might have to pay the whole amount you owe, or make monthly payments. This will be based on the financial statement you have completed and any requests made by the creditors.
If you cannot afford the amount you have been ordered to pay, it is important to speak to a debt adviser straight away. We have details of debt advice organisations in the section below.
Getting debt advice
If you cannot repay your debts in a reasonable amount of time, it is important to get specialist advice from a free debt advice agency. Organisations that can help include:
- StepChange Debt Charity
- Citizens Advice
- PayPlan
- National Debtline (England, Scotland and Wales)
- Advice NI (Northern Ireland).
These organisations provide telephone advice services and online information.
Citizens Advice and Advice NI also offer face-to-face debt advice. You can also find face-to-face and local debt advice services near you by visiting moneyadviceservice.org.uk and searching for “debt advice locator”.
What happens to your debts if you die
Everything you leave when you die is called your estate. This is made up of everything you own, minus everything you owe. Your estate includes money, property and belongings. It also includes your share of anything you own jointly with someone else.
Anything you owe is taken off the value of your estate. This includes any unpaid debts.
If your debts add up to less than the value of your estate, any money or possessions you leave are used to repay them.
If your debts add up to more than the value of your estate, your estate is usually divided up based on what you owe each creditor. This means if you owe someone a larger amount, they will get a larger share of your estate.
If there is nothing left in your estate, the debts are usually cancelled (written off). The debt can be cancelled if:
- the debts are only in your name
- there is no guarantor – this is someone who has legally agreed to pay the debt if you cannot pay.
If you take out a joint loan with someone else, you are both responsible for the whole loan. If you die, your joint borrower becomes responsible for repaying any leftover debt. If you have a guarantor, they will become responsible for paying off the debt.
Our financial guides, and other organisations such as StepChange Debt Charity and National Debtline, can advise you on what will happen to your debts if you die.
We have more information about sorting out your financial affairs.
Student loans
If you die before your student loan has been repaid, the loan is cancelled.
What happens to your house if you die
If you die, your house or your share of it forms part of your estate. This is everything you own when you die, such as money, property and possessions. Money you owe, such as loans and debts, will be taken out.
Any mortgage or loan secured on the property is paid using the money in your estate. After everything you owe has been paid, the rest of your estate is passed on to others.
If you have a will, your estate is given out to others in the way you chose.
If you do not have a will, the law says who should sort out your estate and how it should be given out. Your house or share of it may be passed on to:
- your husband, wife or civil partner
- close family members, such as parents, children, brothers or sisters.
A partner you live with but are not married to cannot inherit from you, unless you have made a will. If you have not divorced your husband or wife, they still inherit your estate. This is unless your will says who you want your estate to go to instead.
Who your estate is passed on to depends on your situation and where you live.
If you own your home with someone else
If you own your home with someone else, what happens to the property after you die depends on which type of joint ownership you have. There are 2 types of joint ownership. We have more information about joint property ownership on our page about writing a will.
Claiming on life insurance
You may have taken out life insurance along with a secured loan against your home or your mortgage. This means the insurance can be used to pay off these debts when you die, without selling your home.
You may have also taken out life insurance with other loans. This means the loan can be repaid when you die without reducing the value of your estate.
We have more information about life insurance.
Related pages
About our information
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References
Below is a sample of the sources used in our finances information. If you would like more information about the sources we use, please contact us at cancerinformationteam@macmillan.org.uk
Energy savings trust. www.energysavingstrust.org.uk [accessed September 2022].
GOV.UK. Housing costs and Universal Credit. Available from www.gov.uk/housing-and-universal-credit/how-to-claim [accessed May 2022].
Gov.uk. www.gov.uk [accessed September 2022]
Gov.Scotland www.mygov.scot [accessed September 2022]
Gov.Wales. www.gov.wales [accessed September 2022]
nidirect.gov.uk www.nidirect.gov.uk [accessed September 2022].
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Reviewers
Our financial information has been written, revised and edited by Macmillan Cancer Support’s Cancer Information Development team. It has been reviewed by finance, housing and energy experts and people living with cancer. It has been approved by Amanda South, Macmillan Financial Guidance Service Manager.
Our cancer information has been awarded the PIF TICK. Created by the Patient Information Forum, this quality mark shows we meet PIF’s 10 criteria for trustworthy health information.
Date reviewed
Our cancer information meets the PIF TICK quality mark.
This means it is easy to use, up-to-date and based on the latest evidence. Learn more about how we produce our information.
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