More and more of us are experiencing personal insolvency, which is when you just can’t pay your debts. In England and Wales in March, 12,252 individual insolvencies were registered, which was 30% higher than in March 2025 and 3% higher than in February 2026.
“We are seeing more people using credit to get through the month. When that’s the approach people are taking, debts can really build up quickly,” says Matthew Sheeran, collaborations partner at Money Wellness and trained debt advisor. He says it’s largely down to the rising cost of living, recent fuel prices and the economic impact of the past few years.
For many, “disposable income has just dropped significantly. And it doesn’t take much to drag people to a point where they might need debt advice or debt solution,” he explains. “We’re seeing that people just don’t have the resiliency they used to have to absorb financial shocks.”
But do not despair. If you feel like you are struggling with debt, there’s lots you can do immediately – today even – that will help. “You don’t need a perfect plan. You don’t have to have everything mapped out from point A all the way through to the end,” says Sheeran. “Just get that plan started.”
So, see if you can ring-fence a morning to work your way through these six simple steps, which could help dig you out of a financial hole…
STEP 1: Lay it all out
“Get clear on what you owe to different creditors. So many people will understandably bury their heads in the sand and not know exactly what they owe and who they owe it to, so get a list together of everyone that you owe money to,” says Sheeran. “How much do you owe to those lenders and how much are they asking for each month? Jot down what the interest rates are as well, to help you make a better informed decision on which to prioritise.”
This, he says, will help you “unclutter your mind” and start “unpicking” what needs to be tackled and in what order. “That first step can often be painful, addressing it is hard, but once you’ve done it, everything just feels that little bit more clear.”
STEP 2: Check your priority bills
Before paying off any other debts, “make sure your priority bills are covered. So make sure you’ve got enough money for your rent, your mortgage, council tax, your energy,” says Sheeran. “They’re the ones that need to be accounted for first. That’s going to really allow you to get a sense of what you’ve got left to put towards your non-priority debts.”
STEP 3: Boost your income (where possible)
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“Are there additional benefits you’re entitled to that you weren’t aware of?” asks Sheeran. “A lot of people that receive Universal Credit are actually eligible for different elements of Universal Credit. It’s making sure you get everything you’re eligible for, like council tax support. Different councils have their own discretionary funds, so it’s just trying to tick all of those boxes, because it might be that you’re entitled to more than you think.”
An online benefits calculator is a very swift way to do this, like Turn2Us’s. “For the average person we’ve supported, we’ve noticed they’re eligible for an additional £250 a month for benefits, so it’s not like £30,” says Sheeran. “It’s an amount of money that can make a real difference to repaying your debts.”
STEP 4: Access any grants you might be eligible for
“Try to receive any extra grants you might be entitled to, especially if you’ve got debts within priority bills,” continues Sheeran. “A lot of utility providers have schemes and grants that can actually clear your debt if you’re in financial hardship. So tap into those resources. If you’re able to address big energy debt, that’s going to make everything else a little bit easier.”
STEP 5: Speak to your lenders
“If you’ve got a number of non-priority debts (like credit cards etc.), it’s about getting a plan in place that’s suitable for those lenders,” says Sheeran. “Just by picking up the phone and speaking to your creditors, there is actually more they can do to make your payments more affordable. They might be able to freeze interest and charges, and give you a break from payments for a certain period of time.”
He recommends speaking to every lender directly to set up a plan with each that you can genuinely afford, “then that’s going to give you a long-term plan to become debt free”.
STEP 6: Don’t take on more debt
“I’ve seen it in customers I’ve supported that maybe don’t realise they can’t catch up, and they take out additional debt, thinking things will get better. But once your debt becomes unmanageable, that’s not a sign to take out additional credit,” warns Sheeran. “It’s a sign to get support with the debt you’ve already got.”
Overwhelmed? Speak to a professional
“If debt’s becoming unmanageable, or you see a significant change in your circumstances, pick up the phone and speak to a free debt advice organisation who will just be able to give you that starting point,” says Sheeran.
Money Wellness, National Debtline and StepChange all offer free support.