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National Debtline

Advice you can trust

Dealing with creditors

Different creditors have different powers to get their money back from you. Some have stronger powers than others, and it is usually best to deal with these first.

dealing with credtors -  woman drinking a cup of tea

Golden rules

  • Keep a copy of any letters you send to creditors and any letters they send to you.
  • Send important letters by recorded delivery.
  • If creditors call you, make a note of who called and when. Take the name of the person you spoke to.
  • If you are not happy with a creditor's behaviour, make a brief note of the details. This may be helpful if you later decide to complain.

Your budget

  • Don't forget that you need to work out a budget before you tackle your debt problems.
  • After you have worked out your income and outgoings you will be able to see how much you have left over.
  • You can then decide on the best way to deal with your debts.

Priority debts: how do you know which debts to pay first?

Priority creditors have stronger powers to get their money back than non-priority creditors. The list below gives the main examples of priority creditors and the worst action they can take if you don’t pay them. Don't panic. You should be given warning and, by acting quickly, you should be able to stop these things happening.
  • Mortgage, secured loan or rent arrears. Your lender or landlord could apply to court to repossess your home.
  • Gas or electricity arrears. Your supply could be cut off.
  • Council tax arrears. You could be sent to prison.
  • Magistrates’ court fines. You could be sent to prison.

Non-priority debts

These creditors have less power to make you pay what you owe.

  • Credit and charge cards.
  • Unsecured personal loans.
  • Bank and building society loans and overdrafts.
  • Debts to family and friends.
  • Doorstep-collected loans.
  • Payday loans.
  • Water rates.

How do I work out what to pay my creditors?

  • If you have money left over after paying your essential outgoings, make offers to your priority creditors first.
  • Once you have made arrangements with your priority creditors, share any money you have left over between your non-priority creditors.

What if a creditor refuses my offer?

  • If a creditor does not accept your first offer, do not give up.
  • Ask them to reconsider. Our sample letters will help you.
  • If you are negotiating with your lender to try and get them to agree to your offer, make the payment that you offered anyway. This will show them that you want to pay your debts.

Should I complain?

Our fact sheet 'Complaining about your lender' deals with complaints about creditors and debt collection agencies.

Consider complaining if:

  • your creditor ignores or rejects your offer of payment;
  • will not freeze interest and charges; or
  • you are not happy with the way they have treated you.