Letters to Creditors - The Second Step

Banking and Borrowing

Updated on 16 December 2008 | 0 Comments

If you've asked your creditors for some leeway in helping you to deal with your debt problems, here's what you say if they refuse.

Last week we suggested a form of letter that you might use for your creditors if you were beginning to struggle with debts - the idea being that you asked them to freeze your interest rate and accept a lower monthly payment until you got out of the hole you were temporarily in.

Unfortunately, even though creditors have an obligation to be fair and reasonable in their dealings with you, some of them might not be terribly accommodating. You could get a letter from one or two of them refusing to go along with your idea and threatening you with court action. Well, as those who frequent our Dealing with Debt discussion board like to say: 'You can't get blood out of a stone!' so here's what your response could be:

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Dear Sir/Madam

RE: Grabbit & Run Credit Card - Account Number:123456789

Thank you for your letter of date/month/year in which you refused my request to accept a lower offer of payment during my temporary difficulties. I note that you are also not prepared to freeze the interest rate and charges in the meantime.

Unfortunately, I am unable to improve on my offer so I, respectfully, ask you to reconsider my proposal. I enclose, once again, a list of my creditors, which shows the balances left to pay and my regular monthly payments to each together with a list of my income and household expenditure.

I appreciate that you are not obliged to assist me but, should you take legal action against me, I understand that interest would be frozen in the event of a County Court Judgement and that I would be able to explain to the court that I had already asked you to consider my current proposal and that you refused.

I, therefore, hope you will reconsider my offer and, in the meantime, as a gesture of good faith, I will forward my reduced payments to you as proposed.

Yours faithfully

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Remember that, even if they write back demanding a larger monthly payment, there's no point in making an offer that you won't be able to maintain, so don't be intimidated. And be reassured that if the matter does end up in court, a judge is far more likely to be on your side than theirs if you have shown that you are doing your level best to meet your obligations. So stick to your guns - politely but firmly!

Find out more about how to Get Out Of Debt and use our Statement of Affairs calculator.

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