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Debt Solutions
Debt Information
- Debt Management FAQ
- Signs of a Debt Problem
- Take Control of a Debt Problem
- Negotiating With Creditors
- Know Your Debts
Negotiating With Creditors
It is perfectly permissible for you to contact your creditors at any time and explain your plight and ask for them to do a deal with you. Due to the fact that many people are now struggling for debt and creditors are wary of compromising too early you may need to contact creditors several times before they will agree to compromise with you.
What you will seek as way of compromise from your creditors will reflect:
- the debts that you have
- the disposable income that you have left over to offer
- whether you have belongings worth selling to pay some or all of the debt off
- whether or not your situation is likely to get better.
It’s important that creditors can see that what you are asking for is reasonable in the circumstances. So make sure you:
- are clear about what you are asking for
- always ask to freeze interest. This is vital because if interest is not frozen your debt will continue to grow and you will continue to be in a parlous position
- Provide evidence that you can only pay what you are offering
- be clear about when you can pay be it monthly or weekly
- If you envisage changes in your circumstances then you also need to mention that at this point, so it can be flagged up.
- Let your creditors know if you have priorty debts and that these need to be cleared first
- If you don’t succeed in getting agreement the first time, keep trying
Keep copies of all your letters to creditors and their replies and a note of any phone calls with them, in case you need them later. If they try to get more money out of you than you can afford, you must resist. If they are insistent please call us for advice.
Creditors may challenge your budget and claim that you can afford to pay more than you are offering. You should always be able to prove your budget so you will need to keep copies of all your utility bills and copies of annual statements for such as mortgages.
If creditors do not reply to your offers, start paying them what you can afford anyway, and get advice.
As a Debt Management Company we can negotiate with your creditors for you, we will attempt to freeze interest and take away the pressure or receiving calls or letter, but there is no guarantee that they will agree to compromise with us. Further even if creditors agree to a payment plan and even if you keep to the plan, this does not prevent them taking court action against you. The agreement is not one that can be legally informed and has no enforcement rights. Any creditor can at any stage refuse to accept proffered monthly payments and so it is important that any correspondence is kept and handed to your advisor. If action is taken against you we can still help and provide advice.
There are rules in existence which require debt collectors to treat debtors fairly. They must abide by the same rules as others with regard to race, sex and mental capacity. If you feel that you have been unfairly treated we may be able to help. We should be able to stand in between you and the creditor and take the pressure from you
There are also rules which apply to the collection of arrears by other organisations such as local councils and gas and electricity companies.
Councils must treat you fairly. For example, if you are a council tenant and owe rent arrears, the council has to try and come to an agreement with you to make affordable repayments and help you to claim Housing Benefit before it can start any action to evict you.
If you have gas and electricity arrears, your supplier should offer you an arrangement to pay off the arrears at a rate you can afford or to install a prepayment meter. They must offer special protection to vulnerable customers such as people of pensionable age or those who have long-term ill-heath.
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