Blackadder and a cheap prostitute named Molly are disturbed at four in the morning by the baby-eating Bishop of Bath and Wells, who has come to collect on a loan. A year before the episode, Blackadder borrowed one thousand pounds from the Bank of the Black Monks of St. Herod (whose two mottos are "Banking with a smile and a stab" and "repayment or revenge"), and the debt is now due. When Blackadder admits that he cannot pay ("I've gone and lost my wallet," he claims, rather unconvincingly), the Bishop takes him to a graveyard, where they visit the grave of a previous customer: a man from Chelmsford who died painfully of having a spike up his backside. The Bishop informs Blackadder that he has until sundown to raise the money, or he will be sodomized with a red-hot poker.
Since Blackadder only has eighty-five pounds in the whole world, he has to work quickly to get some more money. Unfortunately, he is interrupted by a summons from the Queen. After cracking a ridiculously juvenile joke at his expense, the Queen forces Blackadder to pay up on her bet with Lord Melchett that Blackadder wouldn't fall for the joke. Rather conveniently, the bet is for eighty-five pounds, and Blackadder is left penniless - although due to what he calls "an elaborate web of lies", the entire court believe him to be incredibly rich.
Upon Blackadder's return home, Baldrick develops a cunning plan that Blackadder become a rent boy down at the docks. Blackadder is desperate for the money, but dresses Baldrick in women's clothing and takes him to the docks where they encounter a fat and immature sailor who pays them sixpence for a kiss (from Blackadder), a goodnight story (Blackadder again) and a "good, hard shag" (from Baldrick). After Baldrick suggests that they bet the money on a cock fight after entering a bird which is a dead cert but has odds of forty thousand to one, Blackadder is again summoned to the Queen, who pretends to apologise for her previous infantile joke. The apology is of course just another joke, and Blackadder is quickly relieved of his sixpence so that the Queen can play a game of shove ha'penny. While Blackadder is at the palace, Lord Percy utilises Blackadder's living room to attempt to discover the secret of alchemy and thus restore Blackadder's fortunes. Unfortunately all he ends up producing is a terrible smell and a lump of a green glowing substance (aptly named by Blackadder as 'green,') which does not impress Blackadder who calls Percy a berk, although Percy plans to make it into jewellery.
Returning home once more, Blackadder determines that he must sell his house, and puts it on the market. He manages to sell it to a couple on the strength of the lack of indoor lavatories ("I can't stand those dirty indoor things," the wife says after confirming that the privy facilities consist of nothing more than a window and the street), and Baldrick beats the husband up until he agrees to pay £1100.
In this apparent moment of triumph, the Queen again summons Edmund to the palace, where she claims that the French intend to invade and that every noble must pay five hundred pounds for the upkeep of the navies. Unfortunately for Blackadder, Lord Melchett is also penniless, and the Queen declares that since Edmund is "so fabulously wealthy", he can pay double to compensate. Blackadder protests that he has a cash flow problem, but the Queen notices his bulging purse containing just over a thousand pounds. Blackadder claims it is just small change he left in his codpiece by accident, which impresses the Queen greatly, but as soon as he leaves it is revealed to be yet another practical joke at Blackadder's expense, although it doesn't occur to the Queen to return the money afterwards. Upon returning home Blackadder is faced with the imminent prospect of death, as he now has no money and will shortly not be in possession of his house any longer.
When Blackadder returns home he tells Baldrick he lost the money and decides to run away, until Baldrick points out the Black Bank has branches everywhere and will find him no matter where he flees. Blackadder, finally accepting his fate, asks Baldrick if people would remember him if he dies. Baldrick replies they will indeed: they'll laugh and slap each other on the shoulders, saying "you remember old privy breath?". Blackadder enquires and learns that 'privy-breath' is a nick-name for people who like him: others say "Whoops, I've trod on an Edmund!" when they stand in dog's mess.
Outraged that he is a laughing stock and the butt of jokes to the people, Blackadder comes up with a cunning plan, and sends Baldrick out to obtain a number of items including a sleeping draught and the finest portrait painter in England. Baldrick returns with the painter, Leonardo Acropolis, who hides in the bedroom while the Bishop arrives. After admitting to being a colossal pervert ("animal, vegetable, or mineral - I'll do anything to anything") the Bishop prepares to kill Blackadder, but drinks the sleeping draught mixed with wine which Baldrick gives him and falls unconscious.
When he awakens, he is presented with a painting of himself in a hugely compromising position with another figure who turns out to be Lord Percy, dressed in a pink leather tutu. Blackadder uses this painting (and the preliminary sketches Acropolis made while completing it) to blackmail the Bishop into writing off his debt and giving him a considerable amount of money to buy back his house and cover some other sundry expenses along with the damaged door, which the bishop had battered in using Baldrick as a ram, also for a celebration at Mrs. Miggins' pie shop. The Bishop is impressed with the depths of Blackadder's scheme, and asks him if he has ever considered a career in the Church.
As with all the episodes in this season, there is a distinct song sung describing the story in that particular episode. In this episode, it goes: