What to do if you can't pay a bill

Every protection in this area is stronger for someone who makes contact early. Once an account has defaulted, been passed to a collection agency or been registered on your credit file, options narrow sharply and the marker stays for six years.

Use the words 'financial difficulty' or 'financial hardship'. These are defined terms in Financial Conduct Authority rules and in Ofgem's supply licence conditions, and they route you from a collections queue to a team with different powers — pausing interest, varying payments, extending terms and holding enforcement.

Be specific about what you can pay. 'I can pay £40 a month starting on the 15th' is a proposal that can be accepted. 'I can't pay' is not, and leaves the creditor to decide.

Get every arrangement in writing with a reference number, and check what it does to your credit file — some arrangements are recorded as an arrangement to pay, which is visible to lenders but far less damaging than a default.

The Debt Respite Scheme, known as Breathing Space, is one of the most useful and least-known protections in British debt law. It gives 60 days during which creditors must stop charging interest, fees and charges, stop enforcement action, and stop contacting you about the debt.

It is accessed through a regulated debt adviser — you cannot apply directly. National Debtline, StepChange, Citizens Advice and Christians Against Poverty can all initiate it as part of giving you advice.

It covers most personal debts including credit cards, loans, overdrafts, council tax arrears, energy arrears and rent arrears, though ongoing liabilities must still be paid during the period.

A separate mental health crisis Breathing Space lasts for the duration of crisis treatment plus 30 days, with no 60-day cap, and can be requested by an approved mental health professional.

It is not debt relief. The debt remains and interest resumes afterwards. What it buys is time to get advice and reach an arrangement without the debt growing or enforcement escalating.

Energy suppliers must, under Ofgem licence conditions, offer payment plans you can actually afford, taking your income and outgoings into account. They cannot disconnect a customer who is complying with an arrangement, and disconnection is subject to strict notice requirements and is effectively a last resort. Many suppliers also run hardship funds that write off arrears outright.

Banks and lenders must treat customers in financial difficulty fairly under FCA rules, and the Consumer Duty strengthened that. Options include reduced payments, payment deferrals, extended terms, interest freezes and, for mortgages, term extensions or a switch to interest-only.

Councils must consider Council Tax Reduction, discretionary hardship relief and payment arrangements — but council tax enforcement escalates unusually fast, from a reminder to a liability order to enforcement agents within months, so it is a debt to address early rather than late.

Water companies cannot disconnect a household for non-payment. Every one runs a social tariff for low-income customers, and several operate arrears-matching schemes that write off debt as you pay. These are substantially under-claimed.

Landlords and mortgage lenders must follow pre-action protocols before seeking possession, including engaging with you about arrears. Courts expect to see that this happened.

When there is not enough for everything, the order matters, and it is not the order the loudest creditor suggests. Prioritise debts where non-payment costs you something you cannot easily replace. Debt advisers call these priority debts.

First: rent or mortgage. Losing housing is the hardest outcome to recover from, and pre-action protocols mean engagement genuinely helps.

Second: council tax, which escalates to enforcement agents faster than almost any other debt, and in England can in principle lead to committal proceedings.

Third: energy, where disconnection is possible in principle, and TV licence, where non-payment is a criminal offence.

Fourth: court fines, child maintenance and tax debts, all of which have enforcement powers ordinary creditors lack — including deduction from wages or benefits without a court order.

Last: unsecured credit — credit cards, personal loans, overdrafts, buy-now-pay-later, catalogue debt. These damage your credit file and can lead to a county court judgment, but they do not take your home, your electricity or your liberty. Paying them ahead of the categories above is the most common and most costly mistake people make.