Payment offer - what to do if a creditor refuses

 February 2017

Fact sheet no. 14 EW Payment offer - what to do if a creditor refuses

This fact sheet tells you how to deal with your non-priority creditors, such as credit cards, unsecured loans and overdrafts, if they refuse to accept the payment offer you have made them. If you are trying to deal directly with your creditors and negotiate an affordable repayment plan, this fact sheet has useful information and advice on tactics you can use. Contact us for advice if you are unsure whether your creditors are priority or non-priority.

Use this fact sheet to:

  • respond to a refusal of your offer;
  • get interest on your debt frozen;
  • make a complaint about your creditor.

The sample letters mentioned in this fact sheet can be filled in on our website.

If a creditor refuses my offer

When you write to your creditors making an offer of payment you often get a mixed response; with some creditors accepting your offer and some refusing.  If a creditor has refused your offer of payment then you can use the Reconsider my pro-rata offer sample letter to ask them to reconsider.

  • Explain your circumstances again and enclose a personal budget.
  • It is a good idea to start making the reduced payments you have offered on a regular basis and point out that you are doing this as a ‘gesture of goodwill’.
  • It is also worth telling them if any of your other creditors have accepted your offers.
  • If you can afford to, send photocopies of letters from your other creditors as proof.
  • Explain that you are unable to increase your offer of payment to this creditor without upsetting the other arrangements you have made.  Point out that you have to treat all your creditors fairly.

If my creditors refuse to freeze interest

If a creditor has accepted your offer of payment but is still adding interest, then use the Freeze interest sample letter.  

Sometimes creditors refuse to freeze the interest altogether or only agree to reduce the interest that they are charging.

    If your offer of payment is less than the interest that is being added on, then the debt will just increase.  This means you are never going to pay the debt off.  Explain this to your creditors.  This means that there will be no ‘light at the end of the tunnel’ and less incentive for you to keep up with the payments. Contact us for advice.

If my creditors still won't accept the offer

Your creditors do not have to accept your offer of payment or freeze interest. If they continue to refuse what you are asking for, carry on making the payments you have offered anyway. Keep trying to persuade your creditors by writing to them again.

Should I give up and pay what the creditor wants?

It is very important that you don’t give up if your creditors refuse your offer.  Make the payments that you have offered and ask the creditors to reconsider.  Stick to your guns. If you let creditors persuade you to pay more than you can afford then you may fall behind with your mortgage/rent or your other essential household bills.  You may also find you do not have enough money left to live on.

How to complain

Financial Ombudsman Service

See our fact sheet:

Complaining about your lender.

Under the Consumer Credit Act 2006 there are new rights to complain to the Financial Ombudsman Service about how your lender or debt collection agency has dealt with your account. 

You will have to follow the lender’s complaints procedure first. You can only complain about events that happen from April 2007 onwards.  The address for the Financial Ombudsman Service can be found under Useful contacts later in this fact sheet.

The Standards of Lending Practice

If your complaint is about a bank or building society then they should have a complaints procedure under the Standards of Lending Practice.  If you do not feel they have dealt with your complaint satisfactorily, you may be able to complain further to the Financial Ombudsman Service.  The address is under Useful contacts later in this fact sheet.

Trade Associations

If you feel your creditor is unreasonably refusing your offer of payment then you should ask if they are members of a trade association. 

Most trade associations have codes of practice that their members must follow.  Ask the creditor for details of their complaints procedure.  You will usually be expected to make a complaint to the creditor before taking it up with the trade association.  There is a list of the most relevant trade associations under Useful contacts later in this fact sheet.

Useful contacts

Financial Conduct Authority
Phone: 0800 111 6768
Email: consumer.queries@fca.org.uk
Financial Ombudsman Service
Phone: 0800 023 4567
Consumer Credit Trade Association (CCTA)
Phone: 0127 471 4959
Finance & Leasing Association (FLA)
Phone: 020 7836 6511
Credit Services Association Ltd (CSA)
Phone: 0191 217 0775
Consumer Credit Association (CCAUK)
Phone: 01244 394 760