How to Get Out of Debt: A Step-by-Step Plan for Every Type of Consumer Debt

Debt is not a moral failing. It is easy to feel otherwise, because the culture around money treats being in debt as a failure of character, but the truth is more ordinary and less shameful than that. Most consumer debt builds up through some combination of wages that have not kept pace with the cost of living, an unexpected expense at the worst possible moment, easy credit offered precisely when you are most stretched, and the simple gap between what comes in and what life costs. Plenty of careful, hard-working people end up in debt. How you got here matters far less than what you do next, and the path out is the same regardless: face the numbers, make a plan, and work it consistently until it is done.

This is the full framework, the parent guide to getting out of debt, and it covers the consumer debts most people carry: credit cards and store cards, personal loans, overdrafts, car finance, and buy now, pay later. It does not cover mortgages, which work on entirely different mechanics, or student loans, which are a special case with their own rules. If student loans are your concern, our dedicated student loan guide handles those separately. For everything else, what follows takes you from the point where you cannot face opening the letters all the way to the last payment made.

It is written for both the UK and the US. The core strategy, facing the numbers, stopping the inflow, and attacking the debt in a deliberate order, is universal, but the specific products and the formal help available differ a great deal between the two countries, so those sections are clearly split. None of this is fast: most people take two to four years to clear serious consumer debt. But it is completely achievable, and the hardest part is almost always the first step. One more thing before we begin. Read this as a map, not a sermon. You do not have to do every step perfectly, or all at once, and you will probably have setbacks along the way, a month where an emergency knocks you off course, a week where the motivation drains away. None of that means the plan has failed. Debt is paid off in an untidy, two-steps-forward-one-step-back fashion by almost everyone who does it, and the only version that truly fails is the one you abandon entirely. Progress, not perfection, is the whole game.

Step 1: Face the Full Picture (the Debt Inventory)

The first step is the one people avoid the longest, and it is the most important: write down everything you owe, in one place. Not a rough sense of it, not the vague dread of a number you have been refusing to look at, but the actual figures. For every debt, list who you owe, the balance, the interest rate, the minimum monthly payment, and then the total of all those minimums added together. The reason this comes first, before any clever tactic, is that you cannot make decisions about money you have not measured. The interest rate tells you which debt is hurting you most; the balance tells you which is closest to gone; the minimums tell you how much breathing room you actually have. Without those numbers in front of you, any plan is guesswork, and guesswork is how people end up paying down the wrong debt first for years.

Include everything, even the debts that feel too small or too awkward to count: the store card, the overdraft you have lived in for years, the buy now, pay later balances, the money you borrowed from a family member. A debt left off the list is a debt that quietly keeps costing you while you focus your attention elsewhere. Then total three things: your total debt, your total minimum monthly payments, and what share of your take-home pay those minimums consume. If the minimums alone swallow more than half your income, that is a sign the problem may be structural rather than one of budgeting, and you should skip ahead to the section on formal help.

Here is the part nobody tells you: the total is almost always less frightening on paper than it was as a formless dread in your head. Not knowing is its own kind of torment, a number that grows in the dark and follows you around. Writing it down, however large it turns out to be, converts it from a source of free-floating anxiety into a problem with a definite size. And a problem with a definite size can be planned for, attacked, and solved, which the vague dread never could. Many people describe the moment they finally add it all up as a strange relief, even when the figure is bigger than they feared. The monster under the bed is always worse than the monster you can see. Once it has a number, it stops being a feeling you carry around and becomes a task you can start chipping away at, which is a far easier thing to live with.

This inventory is also the one part of the process that can be made genuinely painless. Endute connects to your bank accounts and brings every balance into a single view, including your debts, so you are not logging into six different apps and digging out a paper statement to assemble the picture by hand. The debt inventory, the step people dread the most, becomes something the app has already done for you, updated automatically as your balances change.

Step 2: Stop the Bleeding

Before you can pay debt down, you have to stop it going up, because you cannot empty a bath with the taps still running. This step is about cutting off the inflow while you work on the outflow, and it is mostly mechanical. It is also, for many people, the genuinely hard part, harder than the maths, because it means changing a habit. If reaching for a card has become the automatic response to a tight week or a stressful day, you are not just changing a payment method, you are interrupting a reflex. That is why the moves below are about friction and physical distance rather than willpower: the less available the credit is, the less you have to rely on resisting it in the moment, which is exactly when resistance is weakest.

• Take the cards out of circulation. Remove them from your wallet, delete them from your phone's saved cards, and clear them from the online shops where they are stored. Some people freeze a card in a block of ice, which sounds silly but works, because the few minutes it takes to thaw is enough to break an impulse purchase.
• Cancel buy now, pay later. These accounts make spending frictionless and are designed to be used again and again, so close them while you clear the balances.
• Switch everyday spending to debit or cash. For the duration, spend only money you actually have. This is not forever; it is for as long as it takes to break the habit of reaching for credit by reflex.
• Put every minimum payment on autopay. Never miss a minimum, because a missed payment triggers fees, can raise your interest rate, and damages your credit, all of which make the hole deeper. Automate the minimums so a forgetful month cannot set you back.

This does not mean you can never use credit again. It means stopping the inflow while you focus on the outflow, so that the progress you make actually sticks instead of being quietly undone by fresh spending. Until the balances are gone, the cards are tools you have deliberately put down. Some people physically remove the cards from their wallet and leave them at home; others delete the saved card details from their phone and their favourite shopping sites, so that buying something requires digging the number out by hand. The specific tactic matters less than the principle, which is to put a few seconds of deliberate effort between you and a purchase, because those few seconds are usually enough to let the impulse pass.

Step 3: Choose Your Payoff Strategy (Snowball vs Avalanche)

Once the bleeding has stopped, you direct your effort. The method is always the same in shape: pay the minimum on every debt, then throw every spare pound or dollar at one target debt until it is gone, and roll that payment onto the next. The two main strategies differ only in which debt you target first. Whichever you choose, the engine that drives the whole thing is that rolled-over payment. Each time a debt is cleared, the money that was feeding it does not get reabsorbed into everyday spending. It is redirected, in full, onto the next debt in line, on top of that debt's existing payment. The effect compounds: the amount you are throwing at the target grows with every debt you clear, which is why the final debts often fall far faster than the first.

The truth is that the best method is the one you actually stick with. If you are disciplined and the interest difference between your debts is large, the avalanche saves you the most money. If you are demoralised and need to see progress, the snowball's quick wins will keep you going, and finishing beats optimising. Most people are best served by starting with the snowball, clearing one small debt for the confidence boost, and then switching to the avalanche for the rest. That hybrid captures the momentum of one and the savings of the other. Do not agonise over the choice. The gap in total cost between the two methods is usually modest, a few hundred over the life of the debt, while the gap between following any method and following none at all is enormous. Pick the one you can feel yourself sticking to, and start this week rather than waiting until you are certain you have chosen optimally.

Whichever you pick, the size of the extra payment is what really matters. Take a £5,000 credit card balance at 22%. On the minimum alone, you would be paying it off for around fourteen years and hand over more than £6,000 in interest. Add a fixed £100 a month on top, and it is gone in about three and a half years, for a fraction of the interest. The strategy decides the order; the extra payment decides the speed. For the deep dive on cards specifically, see our guide to paying off credit card debt fast.

Step 4: Find Extra Money to Throw at the Debt

Every strategy above runs on the same fuel: a fixed payment above the minimums, as large as you can make it. Finding that money is its own project, and it deserves more space than this section can give it, so for the full treatment, see our guide to breaking the paycheck-to-paycheck cycle. In short, it comes from two directions, and an honest plan usually uses both.

• Spend less. Audit and cancel subscriptions, then send what you save straight to the debt. Cut the big three where you can, housing, transport, and food. Sell things you no longer use, because a one-off lump sum lands directly on the balance.
• Earn more. A temporary income boost, overtime, a side job, selling a skill, can dramatically shorten the timeline, as long as every penny of it goes to the debt rather than quietly raising your standard of living.
• Redirect windfalls. Tax refunds, bonuses, gifts, rebates: route them to the debt before they can become spending. These lump sums are powerful, especially on high-interest balances, because they cut the amount interest is charged on straight away.

The framing that helps most is this: every extra pound or dollar above the minimums goes to your target debt, automatically, not to rewards or treats. Even a modest £50 or $50 a month makes a dramatic difference on high-interest debt, and small, consistent amounts aimed in a single direction are what clear debt. On that same £5,000 card at 22%, an extra £100 a month is the difference between fourteen years and three and a half.

Step 5: Specific Tactics by Debt Type

The general strategy covers the bulk of it, but each kind of debt has its own quirks and its own best moves. Here is how to handle the common ones, roughly in the order you are likely to want to tackle them, since the most expensive debts are usually the ones worth clearing first. None of this changes the core plan; it just tells you what to watch for with each type as you work through your list.

Credit cards and store cards. These are usually the most expensive debt you carry, often 20% to 30%, so they are normally the priority. The most powerful single tool is a 0% balance transfer, moving the balance to a new card with no interest for a promotional period (commonly up to around 21 months in the US, and 30 months or more in the UK), so every payment goes to the balance instead of interest. You can also simply call and ask for a lower rate, which works more often than people think. We cover all of this in depth in our guide to paying off credit card debt fast.

Personal loans. These usually carry lower interest than cards, so they are often best left ticking over on their normal payment while you attack higher-rate debt first. If you do want to overpay, check for early repayment charges in the UK or prepayment penalties in the US, though most personal loans allow overpayment freely. A loan can also be the consolidation tool itself, which we come to shortly.

Overdrafts (UK). Since the rules changed in 2020, UK arranged overdrafts typically charge around 40% EAR, which makes a long-term overdraft as expensive as a credit card, even though it feels more innocent because it is just your current account in the red. Treat it as the high-interest debt it is. Set up a standing order to reduce it by a fixed amount each month, and ask your bank to lower the limit as you pay it down, so the cleared space cannot be quietly re-spent.

Car finance (PCP and HP). These are trickier, because many agreements do not let you overpay easily, so check your terms before assuming you can. If you are in negative equity, owing more than the car is worth, the usual answer is to stay the course to the end of the agreement. It is also worth knowing about voluntary termination: in the UK, once you have paid 50% of the total amount payable, you have the right to hand the car back and walk away from the rest, which can be a release valve if the payments have become unmanageable.

Buy now, pay later. Treat these as a priority despite the small balances, because the repayment windows are short and the late fees punitive, and many are 0% for a few months and then jump to 30% or more. Clear them before the interest kicks in. They are also increasingly reported to credit files as the sector comes under tighter regulation, so a missed instalment now does the same damage to your record as any other missed payment.

Debt Consolidation: When It Helps and When It's a Trap

Consolidation means rolling several debts into one, ideally at a lower interest rate, so you have a single payment to manage instead of many. Done right, it is simpler and cheaper. Done wrong, it quietly doubles your debt. The appeal is real and worth acknowledging: instead of five payments on five dates at five rates, you have one payment, one date, one rate, and the mental load of juggling debt drops sharply. That simplicity alone helps some people stay on track. But simplicity is not the same as progress, and the danger is mistaking a tidier-looking debt for a smaller one. Consolidation only genuinely helps if it lowers what you pay and you do not refill the space you have just freed up.

It helps when you are paying 20% to 30% on credit cards and can get a consolidation loan at, say, 8% to 12%; when juggling multiple payments and deadlines is causing you to miss some; and when the new monthly payment is genuinely lower and you commit, firmly, to not re-using the credit you have just cleared.

It is a trap when you consolidate but leave the old cards open, then gradually run them back up, so now you have the consolidation loan and the card debt; when the loan has a longer term, which lowers the monthly payment but increases the total interest you pay; or when you hand money to a debt consolidation company charging upfront fees for something you could arrange yourself.

Two country notes. In the UK, a 0% balance transfer card is effectively free consolidation for credit card debt, as long as you clear it within the promotional period. In the US, be very wary of using a home equity loan to consolidate, because it converts unsecured debt, which a creditor cannot easily take your house over, into secured debt backed by your home, which they can. Lowering the rate is not worth putting your house on the line. The same caution applies, in spirit, to any move that swaps unsecured debt for secured: a lower interest rate is appealing, but you are trading it for a much sharper downside if things go wrong, and that trade is rarely worth it on debt you already have a realistic plan to clear.

How to Get Out of Debt When You're Broke

Everything so far assumes you have at least some spare money to direct at the debt. For a lot of people, that is not the situation: the minimum payments already exceed what is coming in. This is not a willpower problem, and the advice is genuinely different, because what you are facing is not overspending but a shortfall between your income and the basic cost of survival. If that is you, set aside any guilt, because it is not useful here and it is not deserved. The arithmetic is simply that your essential costs and your debt obligations add up to more than your income, and no amount of skipping coffees closes a gap that size. What follows is about protecting the things that matter most and getting the right help, not about trying harder at something that was never going to add up.

The first thing to understand is the difference between priority and non-priority debts, because when money is short, not all debts are equal. Priority debts are the ones with the most serious consequences for non-payment: your rent or mortgage, council tax, energy bills, court fines. Missing these can cost you your home, your power, or your liberty, so they come first, always. Non-priority debts, despite often shouting the loudest, are things like credit cards, overdrafts, personal loans, and catalogue debt. The collection letters can be frightening, but the consequences are far less severe, so they wait. Getting this order wrong is one of the most common and most costly mistakes people make when money is tight. The instinct is to pay whoever is most aggressive, the creditor sending daily texts and red-letter demands, while the quiet bills that could actually cost you your home go unpaid. Reversing that instinct, paying the calm but serious debts first and letting the loud but minor ones wait, is the single most important shift in mindset when your income will not stretch to cover everything.

The second move is to contact your creditors before they contact you. This feels counterintuitive when you have been avoiding the phone, but creditors would almost always rather receive something than nothing, and most have processes for exactly this. Ask for reduced payments, a payment holiday, or frozen interest while you get back on your feet. You are not the first person to ask, and a creditor who freezes the interest on a debt you genuinely cannot pay is doing the maths in their own favour as much as yours. When you make that call, it helps to have your figures ready: what you owe, what you can realistically afford each month, and what is left after your priority bills. A free debt adviser can help you put together a simple statement of income and expenses, and many creditors will take that statement seriously as the basis for a reduced arrangement. Keep a brief record of who you spoke to and what was agreed, because it spares you from explaining the whole situation again next time.

And it bears repeating: being in this position is not a personal failure. The credit system is built to extend credit right up to, and sometimes beyond, people's ability to repay it. If your minimums exceed your income, the formal solutions in the next section exist precisely for you, and using them is a sensible, considered step, not a shameful one. It can help to remember that the people who design lending products do so knowing, in aggregate, that a predictable share of borrowers will be unable to repay. That outcome is priced in from the start. When you reach the point where the numbers genuinely do not work, you are not falling outside the system; you are arriving exactly where the system always expected some people to be, and the formal routes are the orderly way through it.

Formal Debt Solutions: When You Need Real Help

If your debts have outgrown any realistic budget, formal solutions exist, and they are there to be used. The right options differ completely between the UK and the US, so they are split below. One rule applies to both: get advice from a free, non-profit service before you pay anyone, because the charities provide the same help that commercial debt relief firms charge for. It is also worth knowing that none of these solutions is a moral verdict on you. They are legal mechanisms, written into law precisely because policymakers accepted that some people will owe more than they can ever realistically repay, and that a functioning society needs an orderly way to deal with that rather than leaving people trapped forever. Using one is using the system as it was designed to be used.

In the UK, the main routes, from lightest to most serious, are these:

In the US, the landscape is different, built around credit counseling and the bankruptcy code:

Two cautions. In the US, debt settlement has a sting in the tail: any forgiven balance over $600 is usually treated as taxable income, so a written-off debt can produce a tax bill in the year it is settled. And bankruptcy exemptions, what you are allowed to keep, vary dramatically by state, so speak to a bankruptcy attorney about your specific situation rather than relying on a general guide. The broader point with all the formal routes is that the details matter and the consequences are lasting, which is exactly why the free advice services exist: to match your specific circumstances to the right option, at no cost, and without the conflict of interest a fee-charging firm carries.

For free, impartial help, the names to know are StepChange, National Debtline, and Citizens Advice in the UK, and NFCC-member agencies in the US. Steer well clear of any company charging upfront fees for debt relief; at best they charge for work the charities do for nothing, and at worst they are outright scams that leave people worse off than before.

Staying Out of Debt: Building the System

Clearing the debt is the hard part, but staying out of it is what makes the effort worth it, and that comes down to building a system that prevents the next cycle. Briefly, because our guide to managing your money without willpower covers it in full:

• Build an emergency fund, even a small one. The single biggest cause of new debt is an unexpected expense with no cash to cover it. A buffer of even a few hundred breaks that cycle. Start with our guide to building one from zero.
• Automate your bills. Never miss a payment, so fees and credit damage never get the chance to start.
• Keep your spending visible. Drift is what quietly refills a cleared balance, and you cannot catch drift you cannot see.
• Aim to get one month ahead. The goal beyond the emergency fund is to be spending last month's income rather than this month's, so you are always working from a buffer instead of the edge.
• Use credit deliberately, if at all. There is nothing wrong with using a card for the rewards or to build your credit score, but only once you can and do clear it in full every month. Until then, the card stays put down.

Once you are debt-free, Endute helps you stay there, tracking every account in one place, showing your net worth climbing month by month instead of a balance you dread, and catching spending drift before it turns back into debt. The visibility that made the debt inventory painless is the same visibility that keeps you out of it.

Frequently Asked Questions

What is the fastest way to get out of debt?

Stop adding to the debt, then put every spare pound or dollar above the minimums onto one target debt at a time, starting with either the highest interest rate (cheapest overall) or the smallest balance (most motivating). Find extra money by cutting spending and, where possible, earning more, and send any windfall straight to the balance. There is no magic shortcut, but a large fixed payment aimed in one direction clears debt far faster than minimums ever will.

Should I use the debt snowball or the debt avalanche?

The avalanche, paying the highest-interest debt first, saves you the most money. The snowball, paying the smallest balance first, gives you quicker wins and keeps you motivated. The best one is the one you will actually stick with, so if you need momentum, start with the snowball; if you are disciplined and the rate differences are large, use the avalanche. Many people do best with a hybrid: one quick snowball win, then switch to the avalanche.

Can I get out of debt with no money?

If your minimum payments already exceed your income, the usual advice does not apply, and the issue is structural rather than budgeting. Prioritise your essential debts (rent or mortgage, council tax, energy) over credit cards and loans, contact your creditors to ask for reduced payments or frozen interest, and get free advice from a debt charity. Formal solutions, from a UK Debt Relief Order to US bankruptcy, exist precisely for this situation, and using them is sensible, not a failure.

Is debt consolidation a good idea?

It can be, if it genuinely lowers your interest rate and your monthly payment, and if you close or freeze the debts you clear so you do not run them back up. It becomes a trap when you consolidate but keep using the old credit, when the longer term means you pay more interest overall, or when a company charges you upfront fees for it. A 0% balance transfer is effectively free consolidation for credit card debt if you clear it in time.

Can credit card debt be written off?

Not through any government programme that simply wipes it, despite what adverts claim. Genuine write-offs happen only through formal insolvency, a Debt Relief Order or IVA in the UK, or bankruptcy in the US, all with serious consequences, or through debt settlement, where a creditor accepts less than the full balance, which damages your credit and, in the US, can be taxed. If you can repay, every strategy in this guide is better than having debt written off.

How long does it take to get out of debt?

For serious consumer debt, most people take somewhere between two and four years, depending on how much they owe and how much they can put toward it each month. It is rarely fast, but it is steady and predictable once you have a plan: the timeline shortens every time you increase the fixed payment, and lengthens every time you add new debt. The first cleared balance is the hardest; momentum builds from there.

The First Step Is the Hardest

The whole framework, in order: face the numbers in one honest inventory; stop the inflow of new debt; choose a payoff strategy, snowball for momentum or avalanche for savings; find the largest fixed payment you can and aim it at one debt at a time; handle each debt type on its own terms; consolidate only if it genuinely helps; and reach for formal, free help the moment the problem outgrows a budget. None of it is fast, and most people take a few years to become debt-free from serious consumer debt, but every part of it is achievable, and the maths bends in your favour the moment you start. The hardest step is the first one, opening the letters and writing down the total. Everything after that is just the steady, unglamorous work of paying down a number that, for once, is finally getting smaller.

This article is for educational and informational purposes only. It does not constitute financial or legal advice. If you're struggling with debt, contact StepChange (UK, free) or an NFCC-member credit counselor (US, free) for personalised help.