Debt
Negotiation with creditors
Negotiating with creditors can be difficult. You need to be very clear what you want them to agree to. Do not agree to a repayment plan unless you are sure you can meet the payment. You must be realistic – it is better to come to an agreement to pay small amounts than over realistic repayments which you will not be able to keep up.
How much to offer
When you are working out what to offer try to divide the money you have available according to the size of the debt. The larger the debt, the larger the offer of repayment should be. If you do not have enough money left over make only a token offer to non-priority creditors.
Making an offer
Explain why you are offering to repay in this way:
- how much you are offering them
- the exact details of your financial circumstances
- whether you have both priority and non-priority debts. Explain that you are firstly going to re-pay the priority debts, and say how much you are offering to repay to each priority creditors.
- ask your creditors to freeze interest, but you must understand that they are not obliged to do so. offers
Summary of negotiation procedure
- Prepare a letter to send to your creditors letters
- Prepare a financial statement to show your income and outgoings.
- Prepare offers of payment if you have any money left.
- Send all of these to each of your creditors
- Keep A Copy Of Everything You Send!!
Sample Letters
Use these sample letters to get you started.
Creditor’s response
Some creditors may not accept your first offer. They may say they need more information, or they may ask for a larger payment.
Do not be put off - write again. You may have to provide proof of your income such as wage slips and benefit details, proof of your expenditure, include copies of utility bills, details of your mortgage or rent payments.
It is important that you start paying the amount you offered originally. If a collector asks for payment at the door do not offer more than you did in writing.