Step Change is a platform for offering expert advice on how to deal with your debts. It allows you to connect with debt experts over the phone or live chat. Experts analyze the present situation of clients and recommend practical debt solutions. Stepchange doesn’t charge a consultation fee for giving debt management advice. 

Everything You Need to Know About Debt

Debt is the money you owe to the third party such as a bank, credit card provider, or any other type of lender. You become a debtor when you purchase something on credit or use a credit card to get spend more than the amount available in your bank account. Debt might sound to be a bad word to some people but it is not necessarily so. To be precise, there is a distinction between good debt and bad debt. 

Good debt is one that can improve your long-term financial standing. It can take the form of a home loan or car loan, or anything like that. Whereas, you get in bad debt when you use your credit card. It is bad in the sense that it only costs you money and won’t appreciate in value. 

Apart from home loan debt and credit card debt, you might incur personal loan debt, business debt, or tax debt. 

Different Ways of Dealing with Debt

There are different ways of dealing with various types of debt. We have discussed some of them below:

Payday Loans

Since these are short-term loans, you need to pay a very high rate of interest. You can consider payday loans for small purchases. These loans generally last for a few weeks until your next payday. Analyze your alternatives and make sure that you can afford a payday loan. Remember payday loans are not debt solutions. Instead, they might worsen your financial condition if you are unable to cope with it. 

Debt Consolidation Personal Loan

A debt consolidation loan is the best option when you are paying interest on multiple loans. It enables you to roll multiple debts into a single loan for your convenience. Thus, you won’t have to struggle for repaying these debts individually. You must opt for a debt consolidation loan after comparing a range of loans. Then make sure that you borrow such a loan from a reputable lender only. 

Balance Transfer Credit Card

You can transfer your existing card debt over to a new card by using a balance transfer credit card. You can thereby avoid high-interest charges and enjoy significant savings. In this mode of repaying debt, you might have to pay a balance transfer fee. But, the interest will revert to a higher rate once the introductory period is over. Therefore, consult with a debt advisor before going for this method. 

Consolidating Your Debts into Home Loan

You can refinance your home loan to find a better interest rate on your mortgage. Refinancing to a debt consolidation home loan implies your credit card loan and the personal loan will be combined with a mortgage. Thus, you can pay off multiple debts in the form of monthly repayment. Let a debt consultant work out the most cost-effective method of dealing with your debt. 

Debt Settlement Agreement

In a debt settlement agreement, the creditor accepts the amount of loan you can repay over a specified period. Once you have repaid the debt, the creditor can’t recoup the rest of your unpaid debt. Your credit report will reflect this option of debt relief for up to seven years. Explore all other options of repaying debt and then select a debt settlement agreement. 


If can apply for bankruptcy if you are having trouble to repay your debt. Bankruptcy is possible when you are declared to be unable to repay your debt by law. As a result, you are legally free from repaying most of your debts. At the same time, you are restricted from accessing credit in the future. Your credit report will highlight bankruptcy for 7 to 10 years from the date you become bankrupt. 

Government Debt Advice and Solutions

Perhaps you might have come across debt management companies that use phrases like ‘government debt help’ or ‘government debt advice’ to advertise their products to misled people. Though they sound appealing, they refer to formal insolvency solutions like personal bankruptcy, Debt Relief Order, Sequestration, Trust Deed, etc. Undoubtedly, all these forms of debt solutions are invented by the government. But, these debt management companies charge additional fees for imparting these solutions.

If you owe a debt, then collect up to date debt balances from your creditor. Alternatively, you can get a copy of your credit report from a credit reference agency in your country. Credit reference agencies are private companies that maintain details of the debit and credit history of consumers. Thus, you can request them to provide a copy of your credit file.  

A Deeper Insight into the Activities of Step Change

Before we move further, you must have a clear concept of the two terms as mentioned below:

Debt Solutions

Debt solutions refer to the process of dealing with debt. It includes Debt Management Plans or bankruptcy based on the present situation.  

Debt Advice

Though debt solutions and debt advice are interrelated terms, they differ from each other. Debt solution is a process and debt advice is the ultimate outcome of this process. Experts give debt advice after judging the current financial condition of the customer. 

Now let us come to Step Change and how does it work

Step Change experts have a record of helping approximately 650,000 people every year. Their advice is impartial, confidential, and tailor to the individual needs of clients. Step Change follows a three steps approach to deal with debts.

  • First, you are supposed to work on your budget, income, and debts. 
  • Secondly, the information is collected and analyzed to find a debt management solution for you. 
  • Thirdly, Step Change continues to offer debt solutions as long as you need it.

Step Change gets voluntary donations from creditors like banks, government, and loan companies. Apart from offering advice, it manages repayment plans as well. It thereby ensures that you are able to repay your debt in a reasonable amount of time. Step Change experts will annually review your financial situation and recommend an insolvency option. Precision, accuracy, and time-bound solutions are the striking features of this platform. 

Benefits of Joining Hands with Step Change

Here the highly trained advisors work in a sympathetic and supportive manner. Step Change offers the following benefits:

  1. Online debt advice
  2. Online benefits calculator
  3. Card repayment calculator
  4. Money advice
  5. How to cope with debt and stress
  6. 7days and 7ways email program
  7. Online debt advice tool for debt solutions in 20 minutes

Information You Need to Provide to Step Change Advisors

Step Change specifies everything you need to know about your debt before choosing the right course of action. Actually you must be up to date about your financial situation. Otherwise, you can’t ensure that the solution you are getting is correct and will guide you in the right direction. Thus, the first thing you need to do is to collect details about your living costs. Make sure that you include non-priority debts along with the living cost. Generally living cost include:

  • Housing and utility bills
  • Food and housekeeping
  • Living expenses 
  • Educational fees
  • Loans
  • Insurance
  • Taxes
  • Travel and other household services

After making a note of the sources of expenditure, determine the sources of income you receive on a regular basis. The income section of a person enlists the following items:

  • Income from Employment or Self-employment
  • Job Seekers Allowance
  • Working/Child Tax Credit
  • Income Support
  • Housing Benefit
  • Universal Credit
  • Pension Payments
  • Rent or Board if Any
  • Any Other Sources of Income Like housekeeping

Debt Management Plan

A Debt Management Plan is the process of managing your debts and repaying them at affordable rates. Several Debt Management companies design Debt Management Plans on behalf of their clients. Most of them usually charge a certain fee for their work. But, it is completely free for Step Change users. 

Advantages for Considering a Debt Management Plan

  1. You are supposed to pay only which you can afford to pay your creditors. 
  2. You can add arrears of your household bills to your Debt Management Plan. 
  3. You will make one monthly payment but all your creditors will get their money back on time. 
  4. No unsecured debts will be pending once you finish your Debt Management Plan. 
  5. You can have better control over your finances and enjoy peace of mind. 
  6. The creditors won’t have the right to take you to the court if you follow a Debt Management Plan. 

Limitations of a Debt Management Plan

  1. Some of your creditors might still ask you to repay your debt immediately. 
  2. Your debts won’t be written off as you must settle them in full. 
  3. The Debt Management Plan doesn’t cover mortgages or other secured debts. 
  4. Unscrupulous creditors might continue to charge interest after confirming to stop the charges. 
  5. The total amount will increase if creditors continue to add interest and charges on the amount you owe to them.

Individual Voluntary Arrangement (IVA)

People often want to know what is an IVA and why is it beneficial. Individual Voluntary Arrangement is a formal agreement to extend your debt payment over 5 to 6 years. When IVA ends, the leftover unsecured debt is automatically written off. 

Benefits of Individual Voluntary Arrangement

  1. It is convenient for you to repay over a long period. 
  2. You don’t have to pay any setup fee before signing your IVA. 
  3. You can pay a lump sum amount as the final settlement or a lump sum payment followed by monthly payments. 
  4. Since unsecured debt is automatically written off, creditors can’t pursue you for payments. 

Disadvantages of Individual Voluntary Arrangement

  1. You would have to remortgage the equity available at your home. It, in turn, might increase your interest rate. 
  2. IVA might affect your credit rating negatively. 
  3. Maximum 12 extra payments are possible if you are unable to remortgage.
  4. If creditors feel, then they might request a petition for your bankruptcy. 
  5. Creditors might deny approving your IVA. 
  6. IVA is recorded on a public register that is accessible to anyone. 
  7. IVA restricts your spending until the agreement gets over. 

Are You Looking for Budgeting and Debt Management Ideas? Connect with Us

We have a team of experts to provide tips and tricks for managing your budget in the best possible way. If you contact us, then you will come to know the benefits of maintaining a budget. We will help you to make your money last until the last day of your life. We have an income and expenditure budget template to simplify the items you must include in your budget. The budget is the basis for paying your debt on time. Thus, we emphasize the creation of income and expenditure forms for our clients. We then scrutinize the forms and offer a practical way of repaying their budget. 

Furthermore, our budgeting and money advice will help you to boost your income and saving. We are 24hours a day available to offer free debt advice to our clients. Therefore, feel free to give a call on Stepchange contact number 0800 046 5868 and select your suitable solution.