Dealing with debt

Debt can be a problem at any age, but you may find that as you get older you struggle to manage on the income that you have. There are many factors that can lead to debt problems, including retirement, illness, disability, divorce, bereavement and poverty. Inadequate pension provision can also lead some older people to use credit for essential household goods, resulting in debts with high interest repayments.

There are organisations that can help you to deal with your debts and it is important not to panic. If you are in debt, the worst thing you can do is to ignore the problem, as it will only get worse. By taking the following steps, you can help to get your finances in order and devise a clear method for dealing with the problem.

Make a list of your debts

This is the first thing that you need to do in order to tackle the problem. Make a list of all the people that you owe money to. These are called your creditors. Write down their name and contact details, your account or reference number, and the amount of money that you owe. Once you have completed this list you can then work out which debts to deal with first. Some debts are more urgent than others, which is explained below.


Priority Debt

Priority debts are those that have serious consequences, such as a bailiff removing your household items or a  court order or imprisonment. These are the debts you must think about first:

Non-payment of the above debts could result in you losing your home, having your fuel supply cut off, your essential goods being repossessed or bailiffs taking your belongings. As a final resort you could be sent to prison or be made bankrupt.  See below for Local Advice and support.


Non-priority debt

Non-priority debts are not as urgent, as the consequences of non-payment are not as severe. They include the following:

  • Benefit over payments
  • Credit debts such as overdrafts, loans, credit cards hire purchase and catalogue debts
  • Student loans
  • Money borrowed from family or friends

It is still important to acknowledge and to deal with these debts, but they are not as urgent as the priority debts.

Work out your budget

To do this you will need to list all of your income and expenditure. It is important that you are honest about your expenditure or you will not be able to produce a realistic budget plan.

The following list gives some ideas of the things that you will need to include:


  • Earnings for your household
  • Benefits
  • Maintenance payments for you or your children
  • Contributions from other family members or lodgers


  • Housing costs, i.e. your mortgage or rent
  • Council tax
  • Fuel and water charges
  • Telephone charges
  • Housekeeping, i.e. food and cleaning products
  • Travel expenses
  • Insurance
  • Television licence
  • Childcare costs
  • Clothes
  • Any other essential expenses

For more information please visit the Information Now article on Managing your Money.

Contact your creditors

When you have listed all of your income and expenditure you will be able to see whether you have any money left over to pay off your debts and to identify any areas where you can make savings. Once you have done this, you should contact each of your priority creditors and send them a copy of your budget. They will then make arrangements for you to make payments based on the amount you can afford. Once you have done this, you should contact your non-priority creditors and come to an Independent Voluntary Arrangement with them.

We have listed some organisations on the right hand side of this page that can help you to do this.

Financial Help

There are ways of increasing your income to help with debt, and other ways of helping to pay one-off debts.


If you are on a low income and struggling to pay essential costs, it is important to have your benefits checked to ensure that you are receiving all the help that you are entitled to. It may mean that you could qualify for Pension Credit, Council Tax Benefit, or another means-tested benefit. If you have a disability, there may be other benefits that you can claim such as Personal Independence Payment (PIP) or Attendance Allowance. See our section on Benefits for further information.

Utility Debt

There are some energy suppliers who have schemes available to help vulnerable customers who are having difficulty paying their bills. For more information please visit the Information Now article on Help with heating problems and how to pay for them.

Financial help from Charities

If you are not eligible for assistance from your utility provider you may be able to get some financial assistance from a charity such as;

Turn2us is a charity helping people to find out about the charitable grants and state benefits they may be entitled to.

SSAFA Forces Help may be able to offer debt advice and help to people who have served in the armed forces. If SSAFA are unable to help, they will try and find another charity that can.

Local debt advice and practical help

If you need someone to help you to sort out your debts, contact creditors, or apply for financial help, there are organisations that can assist you.

Specialist Debt Advice

Citizens Advice Newcastle in Newcastle have a specialist Debt Advice Service to provide advice and assistance to clients with debt problems. You can access the service by contacting your local Citizens Advice Bureau who will then refer you to the service.

Newcastle City Council: Active Inclusion – Money Matters team provide face to face debt and budgeting advice to vulnerable people who need intensive support to try and stop them becoming homeless.

Shelter North East are a charity who offer face-to-face specialist housing, debt and welfare benefits advice through a team of legal advisers.

PayPlan are a national advice service. They offer a freephone telephone helpline and online advice. They can help with budgeting and debt management..

National Debtline provide a telephone advice service and a range of online self help tools to help you deal with your debts.

StepChange Debt Charity is a registered charity whose purpose is to assist people who are in financial difficulty by providing free, independent, impartial and realistic advice. They can also help you to devise a debt management plan.

Christians Against Poverty (CAP) is an award winning charity which provides free debt counselling, money management courses, budgeting support, and assistance with serious debt problems. The service is open to everyone. They also have self help guides available for free on line.

Money Advice Service is an independent government service set up to help people manage their money. They have developed a Debt Advice Locator where you can find free, confidential and impartial debt advice near you, as well as the Money Helper service.

Debt Advice from your Social Housing Provider

Your Homes Newcastle is a social housing provider and offers a financial inclusion and debt/money advice  service in Newcastle to YHN and private tenants.  You can call or use the request support online form.

Budgeting Advice

Money Advice Service offers a full range of money advice with online guides, a freephone helpline and online chat advice.

Clean Slate support drug and alcohol service users to help them regain control of their finances. They offer free and confidential help and advice along with courses on money management. This includes managing debt, loans, credit unions, budgeting, seeking employment and utility services.

Loan Sharks

Illegal money lenders or Loan Sharks operate outside of the law, taking advantage of people who need cash quickly. They often charge very high interest rates and sometimes use threats and violence to frighten people who can’t pay back their loan. They may resort to bullying and threatening tactics to try to recover the debt. Please do not be tempted to use a loan shark  even if you think you can’t borrow money because you have a poor credit history, are struggling with your finances or your income is low.  Please see the article on Loan Sharks for more information on support available and how to report a loan shark operating in your area.

Other Useful Information

Mental Health and Debt Guide – advice guide from

YMCA Newcastle youth workers offer confidential support, information and advice to young people. They can help with a range of issues such as:  housing and financial hardship.

You may also find these sections on Information Now useful which includes information about bank accounts, savings and financial advice.

Age UK England information on Debt advice – advice and information about Individual Voluntary Arrangements, debt solutions and bankruptcy.

Newcastle’s Borrow Wisely Leaflet for more information on making good decisions about the best way to borrow money.

Financial Stress Information from NHS.UK

Dealing with Debt guide Age UK England

The Money Advice Trust is a national charity, helping people across the UK to tackle their debts and manage their money with confidence.

For more ways to save money Newcastle City Council have a Budgeting leaflet with tips on how to reduce your household expenditure.

The information on this website is for general guidance and is not financial advice. If you need more information or personal advice, please contact an Independent Financial Adviser. For more information please read Getting Advice About Your Finances

Last updated: March 15, 2024