Klarna and buy now pay later debt: what to do

Buy now pay later (BNPL), from providers such as Klarna and Clearpay, lets you split a purchase into a few interest-free payments. Each purchase is small, which is why it is easy to lose track: several plans across different apps can add up to more each month than a single loan. This guide covers what changed when BNPL came under regulation, what happens if you miss payments, and how BNPL fits into a debt solution.

Is buy now pay later regulated?

It is now, for most new agreements. The Financial Conduct Authority (FCA) started regulating deferred payment credit, its name for most BNPL, on 15 July 2026. The FCA describes it as interest-free credit repayable in 12 or fewer instalments over 12 months or less.

Two important exceptions: any BNPL agreement taken out before 15 July 2026 stays unregulated, and if the shop itself provides the credit rather than a separate lender, the new rules do not apply. The FCA suggests checking a lender on its register to see whether it has permission to lend. Unregulated does not mean you do not owe the money: the lender can still chase it and go to court.

What happens if you miss a buy now pay later payment?

Each provider has its own terms, but the usual pattern is:

1. The missed amount is added to your next payment, and a late fee may be charged. For regulated agreements, the lender must tell you about late fees before you sign, and must contact you when you miss a payment to explain what it means.
2. Your credit file may be affected. Missed payments can be shared with credit reference agencies, and if you fall 90 days or more behind, the account may be reported as defaulted. A default stays on your file for 6 years from the date of default, even if you pay it.
3. The debt may go to a debt collector. StepChange warns that BNPL companies can start debt collection action, which can lead to court action or even bailiffs. Our debt collection companies pages explain what individual firms can and cannot do. Before paying anyone, check the letter matches a BNPL account you recognise.

Is buy now pay later a priority debt?

No. National Debtline treats BNPL as non-priority, and says you should pay essential costs such as rent or mortgage, gas, electricity and food first. BNPL payments are often taken automatically from your card, so they can come out before your bills are paid. Our guide to priority and non-priority debts explains how to put your debts in order.

What can you do if you cannot pay?

• Stop new purchases. Pause or delete the apps while you sort things out, and turn off BNPL at checkout.
• List every plan. Note each provider, what is left to pay and when each payment is due.
• Take back control of payments. National Debtline suggests cancelling the continuous payment authority so money is not taken from your account before your priority bills are paid. You still owe the money, so contact the lender at the same time.
• Ask the lender for help. For regulated agreements, lenders must support customers in financial difficulty. Explain your situation and offer what you can afford.
• Consider Breathing Space. In England and Wales, a Breathing Space stops most enforcement and freezes most interest and charges for up to 60 days while you get advice.
• Complain if the lending was unaffordable. For a regulated agreement, complain to the lender first, then to the Financial Ombudsman Service if you are not happy with the answer.

If BNPL is only part of the picture, and you also have cards, catalogues or loans, see credit card debt and catalogue and store card debt.

Can buy now pay later debt go into an IVA, DRO or bankruptcy?

Yes. BNPL is unsecured credit, and it is not on the lists of debts that cannot be included in an IVA, a debt relief order or bankruptcy. It is treated like a credit card or loan.

• IVA. A legally binding agreement under the Insolvency Act 1986, run by a licensed insolvency practitioner. Each BNPL provider you owe becomes a creditor and can vote on your proposal. A protocol IVA usually lasts 5 or 6 years, and fees are taken from your payments.
• DRO. A debt relief order is free and is for people with debts under £50,000, less than £75 a month spare, assets under £2,000 and a vehicle worth less than £4,000.
• Bankruptcy. Costs £680 and clears most unsecured debts, usually after 12 months, but can affect your home and other assets.

Whichever you use, list every BNPL plan, including small ones, and cancel any payment authorities so nothing more is taken once it starts.

IVAs and DROs are available in England, Wales and Northern Ireland. In Scotland, see debt solutions in Scotland. IVA or debt relief order? compares the two most common formal options.

What to do next

1. Log in to each BNPL app and write down what you owe and when each payment is due.
2. Make sure your rent, council tax and energy are covered, then contact each provider with an offer you can afford.
3. Get free, impartial debt advice from MoneyHelper, StepChange, Citizens Advice or National Debtline, especially if BNPL sits alongside other debts: see where to get free debt advice.

For other kinds of borrowing, see types of debt. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser.