Options for managing and paying off your debt in 2020

Debt management is a subject that has long been an issue for adults in the United Kingdom. As far back as 2012, the Citizen’s Advice Bureau informed the country that debt issues were having a negative effect on the life of anyone with a credit obligation, causing stress that lowers quality of life significantly.

Since this time, the options available to adults in the country have widened; those with bad credit now have the option of taking out loans with lenders, often through broker systems such as those offered by us at Citrus. These loans are an excellent choice for the responsible adult who needs finance for a tight situation but can become sources of new debt if they are irresponsibly managed.

As is sadly the case, many adults throughout the UK have mismanaged their finances, living well beyond their means and suffering financially as a result in time. How can we identify issues on the horizon, and what advice does the Citrus team have to offer on being a responsible adult when it comes to finances and credit obligations?

Learning the warning signs

The most common and widespread misconception about debt amongst UK citizens is that it will suddenly occur. Many believe that they will find themselves in the course of a few days or weeks suddenly in debt to a significant degree; this is patently false except in rare situations.

Far more likely is the slow spiral into debt. This is an insidious process, with the first warning sign being a debt that you can’t repay, or feel that you can simply manage as you move on with your life. As a responsible adult, Citrus advises that you instead attack debt aggressively whenever it’s possible to do so. Instead of thinking ‘I can manage this for a while’, allocate money to tackling the obligation head on.

This can be done through adjusting your money in other areas. We strongly recommend separating your income into chunks, with certain amounts allowed for an entertainment and ‘nights out’. This not only helps you get a clearer understanding of your spending patterns over time - it also means that when a debt appears you can reduce these chunks and move the freed-up money into paying off the obligation.

Four options for debt resolution

Before describing these areas, it’s important to note that these are last resort practices. Even if you have a range of credit obligations and find it difficult to manage them at times, you should do your very best to be proactive.


This has long been the more traditional option for resolving your finances when faced with a level of debt that is impossible to pay. Bankruptcy lasts for 12 months, with your owned assets such as vehicles or property at stake so as to resolve payments.

IVA (Individual Voluntary Arrangement):

This is essentially an agreement between you as an individual and the creditors you have obligations for payments to. It’s overseen by a separate entity and gives you better odds of retaining important assets such as your house. The catch? You have to make some level of single payment to your creditors or arrange a payment play over an agreed period (often several years).

DRO (Debt Relief Order):

A new offering as of 2009, the DRO gives protection to those who have smaller debts (defined as less than £15,000). It’s a way to avoid full bankruptcy and gives you the ability to retain more of your assets while writing off your debts.

We hope that you will look towards being proactive and responsible with your money.

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