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How to Handle Your Debt in 2022

Debt is something that no one wants to deal with. It’s like an invisible figure that is constantly over your shoulder, waiting for you to pay it back or pay the price.  

It is calculated that over the last year, there was almost £60k worth of debt per household. This means that the total debt divided by the number of homes would be that much each per household.   

This article will help you with dealing with debt, alongside showing you what causes debt and the consequences. 

person with an empty wallet
Try to keep a cool head when managing your debt! 

What is Debt? 

What is Debt? Debt is a sum of money that is owed or due. This can be owed by anyone including government officials, and even entire countries. 

There are many different types of debt out there, each ranging in severity. These include: 

  • Rent debt 
  • Tax debt 
  • Student loan debt 
  • Bank debt 

Keep in mind, debt is sometimes used as a cover for scams. It’s possible for you to receive fake emails about debt you owe, to coax you into panicking and paying it to a scammer without thinking.

Read Now: How to Avoid Financial Scamming 

What Causes Debt? 

It revolves around money – whether you borrowed some money or cannot pay for something with money. 

You may see debt as unethical, but in hindsight, if you have the money to repay but you refuse to then it’s more of a question of your morals as that money, especially tax debt, would go toward helping people.  

As listed, there are different types of debt that have different causes. Each type of debt has to be handled differently.

Read Now: Why You Should Open a Savings Account 

Rent Debt 

Rent debt is simply when you don’t pay the rent for the building you are living in. The problem with rent debt is that it is a dynamic monthly price so if you don’t pay it, it will eventually accumulate.  

Usually, depending on how lenient your landlord is; your rent debt can exceed £1000 before severe actions are introduced even a possibility that you can get kicked out of the household instead. 

Tax Debt  

Tax debt is when you don’t pay your council taxes. This is okay when you are employed by a company, but when you are self-employed it can be difficult to balance and handle. Tax debt is also accumulated and can result in severe actions too. Unless this debt is more than 5 years old, it will not be wiped off. 

Bank Debt 

This is similar to rent and tax debt, but it is a fixed price until a year after not being repaid. For example, if you’ve taken a loan out for £1000, the £1000 will stay the same but may increase yearly by a small percent due to interest.  

Student Loan Debt  

Student loan debt is significantly different to the others. This one is not as severe, and allows you to be able to pay it off once you start making more than £19,900 a year. There aren’t any consequences to paying it off (unless you are self-employed) and the debt is wiped after 25 years. 

Consequences of Not Paying Debt 

The main consequences of not paying your debts can range in severity depending on your situation. They can sometimes lead to a Bailiff or Debt-Collector showing up at your house. This can be very scary as even though they are only showing up to inform you of the debt, they are very intimidating. 

There are resources online that can help you with dealing with them; the initial advice is to pay the council back directly because Bailiff’s charge extra for their service. Especially if you have no intention of letting them in your house to take items to sell for the debt. 

Many people are against this idea of taking personal belongings to sell for the debt because it is an invasion of privacy and sentimental items. Therefore, most settle to pay the debt back in small increments, this can be negotiated to as little as £20 a month.  

woman organizing packages
You can lose valuable items if you don’t pay your debt.


Dealing with Debt 

The best way of dealing with debt is to negotiate with whom you owe money; if you aren’t earning enough to pay it off then work out a way to pay it off in increments.  

For example, rent is £400 a month but you only get paid £700, if you miss one payment you won’t be able to pay it back the following month so therefore you could slowly pay it back in £50 amounts. Start paying £450 – £500 a month to pay it off faster and without any interference from debt collectors. 

If you ignore your debts, court action could be taken. Even worse, it could eventually be transferred to your children if you pass away, making them go through the same emotions.  

Dealing with student loan debt is very different as you don’t really have to do much, as the student loan system in the UK is easy to manage.

It only really gets paid back in small amount once you hit the threshold which is minimum £19,900 a year so you have plenty of money spare if you must pay £1000 a month in utility, food and water. 

Saving up money is the best way to pay off debts easier without any hassle whatsoever. 

Read Now: 6 Simple Tips to Help You Save Money 

person paying his debts
Paying your debt will wipe your worries away! 


Hopefully, this has helped you figure out debts, the consequences and how to deal with it. Remember that you aren’t alone, and many people go through the same situations as you. There are plenty of people out there who may be going through what you are feeling right now.  

If you want to learn more about debt and money management, the team here at Count can help you.  

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