Payment offer - what to do if a creditor refuses

 November 2015

Fact sheet no. 14

What this fact sheet covers

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.

This fact sheet includes some useful contacts and links for you to get further help.

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

What 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 towards the end of this fact sheet 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.

What 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 towards the end of this fact sheet.  

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.

What 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.