Debt: questions and answers

United Kingdom 11

1. How do I set up a self-managed debt management plan (DMP)?

   To run a DMP yourself, draw up an honest budget, pay priority debts first, split what's left between your non-priority creditors in proportion to what you owe each, and…

2. DMP, DRO or IVA: which debt solution is right if I'm on benefits?

   If you're on benefits with little spare money, a debt relief order is often the best fit: it's free and writes debts off after 12 months if you owe under £50,000, have…

3. When should I send a 'prove it' letter for a debt?

   Send a 'prove it' request under section 77 or 78 of the Consumer Credit Act, in writing with a £1 fee, as soon as you're unsure you owe a debt, ideally before…

4. Struggling with debt? How to choose between a DMP, IVA, DRO or bankruptcy

   Deal with priority debts first, then pick a solution by what you can pay: a DMP or IVA if you have spare income, or a free DRO (under £50,000 owed, under £75 a month…

5. How do you rebuild your finances after losing your home?

   Get help from the council's housing team as soon as you're within 56 days of losing your home, deal with priority bills and any mortgage shortfall with a written…

6. When is debt reasonable, and how fast should you pay it off?

   Debt is reasonable when it's affordable, has an end date and is cheap or income-linked, like a mortgage or student loan. Pay priority debts first, then clear…

7. Can an old credit card debt still be collected?

   An old credit-card debt may be statute barred, but you should check its legal status before paying or acknowledging it. In England and Wales most unsecured debts have a…

8. Should I change my debt management plan strategy?

   A DMP does not need changing simply because it is taking time, but it should be reviewed when your income, spending, balances or interest charges have changed. Check…

9. Can you set aside a CCJ if you never received the claim?

   Yes, a CCJ can sometimes be set aside if you did not receive or respond to the original claim. GOV.UK says you apply using form N244, and the court may require a…

10. What happens when a default leaves your credit file?

    A default can disappear from your credit file six years after the default date, but that does not automatically cancel the underlying debt. A default, an old debt and a…

11. Is it time for a debt management plan, or should I try to ride out the debt?

    A Debt Management Plan can make sense when unsecured debt payments are no longer sustainable, but waiting can make the problem worse. A free debt adviser can compare a…

United States 3

1. Can a lien on my car be used in a relative's bankruptcy?

   Do not add a lien to your car simply because a relative is filing bankruptcy. A bankruptcy discharge can remove a debtor’s personal liability while a valid lien on…

2. What should you do if a debt is sent to collections after a payment dispute?

   A debt collector does not automatically make a disputed debt valid. Ask for the debt details, dispute anything you genuinely do not owe, keep records of payments and…

3. Is the US federal debt crisis real or exaggerated?

   The US debt problem is real, but “crisis” is too vague to describe it precisely. CBO’s 2026 baseline projects debt held by the public at 101% of GDP in 2026 and 120% by…

Worldwide 1

1. Can I protect home equity when I have unsecured debts?

   Unsecured debts do not normally create an immediate claim over your home, but a court judgment, charging order or insolvency process can affect property. Calculate real…