Letters to Send to Creditors

Not all debt situations need an Income and Expenditure Statement and the involvement of debt counsellors. A few well-chosen words can usually give you the opportunity to resolve the debt problem within your financial capabilities.

The following letters do not need to be strictly adhered to and you can change whatever suits your particular scenario. But a few guidelines:

Deal quickly with all correspondence: settlement figures change, as do arrears, and what your creditor allowed last month in their letter might not be on offer if you take a month to reply.

Sending a payment with your letter shows commitment, ability to pay, and is very difficult for the creditor to refuse your offer. That said, many lenders train staff to almost ignore your plans and requests in an attempt to intimidate you into agreeing what they want. IF YOU DON’T HAVE IT – DON’T TELL THEM THEY CAN HAVE IT. You agreeing to their demands looks good on their daily work sheet, but you will be the one who did not maintain the agreement, and you will probably end up in court twice as fast.

1. Request Outstanding Balance

Use to compile an accurate figure of all outstanding balances, the settlement figure (the settlement figure would usually be the amount that the company would take you to court for). And a copy of the agreement (needed by anyone who counsels you to ensure you do owe the money and within a fair contract).

2. Offer of Continued Payment and Part of Arrears

Use to make an offer of payment to an individual creditor who you have fallen into arrears with, but you feel you can now currently maintain and reduce arrears. You may want to send letter number 1 (above) first.

3. Offer of Reduced Payment for a Period

Send to an individual creditor to either reduce a current payment due to a change in circumstances or to start payment of a debt you have not paid for some time. This type of letter needs you to be pro-active in contacting the creditor to show your commitment and ability. Again, you might want to send letter number 1 (above) before sending this letter.