Anyone can get into debt. But how to get back on track?

Photo of a young couple calculating home financesImage: Photo of a young couple calculating home finances

Getting into debt can be worrying and isolating, but it’s never too late to start getting on top of those bills and breathe new life into your credit score.

If the past year has taught us anything it’s that we’re all vulnerable to losing our jobs and finding ourselves up to our necks in debt. Most of us have regular bills that need paying, including mortgages, energy bills, credit card accounts and school fees.

Perhaps you’ve taken out a repayment plan on that snazzy new car you’ve always dreamed of or have holidays booked and weddings planned. Sometimes, we simply have eyes bigger than our bellies when it comes to spending.

Of course, on top of the usual stresses and strains of life, we have had to deal with COVID-19; the pandemic has been ruthless in its desecration of finances for many of us. Add to this lockdowns and the separation of families and loved ones, and it has been easy to feel isolated and perhaps even a little embarrassed that things aren’t looking quite as rosy as you’d like in the money garden. 

You are not alone

According to research by, 1 in 4 people in the U.K. have incurred debt because of COVID-19, with 25- to 34-year-olds taking on the most debt into 2021. Furlough schemes, while keeping many companies afloat, have nonetheless left employees short of cash, meaning that almost £10 billion of personal debt has been accrued because income has been reduced.

Internalising our problems, however, can lead to mental health concerns and affect our relationships too. So, a good first step on the road to financial recovery is to share a problem with others — you might even find that the person you turn to has had a similar experience and sound advice to offer. If nothing else, the act of telling your story may lighten the load a little.

Who can help?

But what if you don’t feel that you can share your concerns with friends or family?

Fortunately, there are plenty of organisations that can offer free impartial support, including the Citizens Advice service and the debt charity StepChange. If you would rather begin by chatting online, take a look at, which is packed with information and provides web-based advisors.

The road to recovery

The good news in all of this is that there are a number of steps you can take to get back on track. A useful place to begin is by checking out your credit scores. This will help you better understand how lenders see you. In turn, you can see whether there are errors you can rectify or simple procedures — such as going on the electoral roll — that can stand you in good stead going forward. Why not take a look at our Help Centre for the key factors that affect your credit scores as a starting point?

Our page on financial help during the coronavirus outbreak can also give you some guidance on switching utility suppliers, payment breaks and which funding you can apply for.

Getting support

Take a breath. In May a new government scheme, Breathing Space, was launched for people struggling with debt. The statutory Debt Respite scheme, covering England and Wales, will offer those who need it a 60-day period of legal protection while they work with a debt adviser on a long-term solution. A similar statutory moratorium scheme has existed in Scotland for some time and the protection period was recently extended to six months on a temporary basis in response to the pandemic.

Even if you’re in debt, you still have rights — you can speak to your lender and discuss a new repayment plan or a payment holiday. According to the National Debt Line, creditors have to treat you fairly and consider your offers of payment and consider freezing interest charges — if you ask them.

Debt: The good and the bad

Good debt vs. bad debt — yes, this really is a thing. Debt means that you owe money but what you owe and how you owe it makes a difference. “Good” debt helps you to increase your income or acquire assets, while “bad” debt is used to buy things that almost never increase in value, such as cars or clothing. Examples of good debt include student loans, business loans or mortgages while bad debt includes credit card balances. Understanding the differences can help you to understand your own debt and responsibilities.

Of course, it’s important to remember that pursuing debt solutions, having mortgage holidays or speaking to your lender about a different repayment plan can affect your credit rating. However, you will still be in a better position than by doing nothing, and any positive steps will help you to rebuild your credit rating for the future.

Bottom line

To misquote that old phrase, life has thrown us a lot of lemons in the past year, but that doesn’t mean that the future has to be sour. These days, there is help and support aplenty when it comes to debt. With a few simple changes, you’ll soon be on the way to making lemonade again.