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Sample letters to creditors

Letters one to six are designed for a third party to write on behalf of a client:
1. Request to suspend payments and freeze interest for a set period (#letter1) 2. Offer of a token payment and request to freeze interest (#letter6) 3. Request a write off of the full debt (#letter3) 4. Offer of pro-rata payments and request to freeze interest (#letter4) 5. Offer of full and final settlement (#letter5) 6. Request a write off from a catalogue company (#letter6)

Letters A to C are designed for the clients/debtors use:
a. Offer of a pro-rata payment (#lettera) b. Offer of token payments (#letterb) c. Unable to offer a payment (#letterc)
You will see that paragraphs have been highlighted for you to give as much detail as possible with regard to age, family situation, background, medical condition, and any other relevant factors which may have led to the problems now being encountered.

Letter One
Request to suspend payments and freeze interest for a set period.
This is used as a temporary measure only. It is useful for people who are experiencing temporary difficulties, but whom may be able to resume payments at a future date e.g. someone in hospital who has had benefit reduced, an intention to resume work, if a lump sum is expected in the near future etc. It can also be useful for someone who may need some time to organize their finances. This strategy gives a period of time where no further collection action is taken, so chasing letters and phone-calls should cease. It is important that the creditor agrees to freeze the interest and charges as this will prevent the indebtedness increasing further. It does however require a review at a later stage, when other options will then need to be considered, depending on the circumstances at the time of the review. Dear Sir/Madam

Re: (provide name address and reference number if known)
We are currently assisting the above client with their finances, and enclose a signed letter

Dear Sir/Madam Re: (provide name address and reference number if known) We are currently assisting the above client with their finances. Include here any possible future potential if appropriate to start repayments again e. It does show goodwill to the creditor. You may also need to give reasons for any high expenditure on the financial statement especially if this expenditure relates to their illness We enclose a financial statement prepared with the client. You may also need to give reasons for any high expenditure on the financial . If interest and charges are being added to the account. months. and they will usually agree to cease any further interest charges on the account. It must be stressed that the client should not be making payments they cannot afford and which would have a detrimental effect on their wellbeing. that the client is finding it difficult to meet even their basic needs at this time. and maybe followed by a request to write off the debt. so that the indebtedness does not increase further. expecting to go back into work. It is also sometimes the only agreement a creditor will make on a temporary basis. Therefore we are unable to make any realistic offer of payment at this time.of authority for your records. it would be appreciated if you would agree to waive these during this time. This is used usually when the client has no real available income.. You can see from this information. and enclose a signed authority for your records. This also shows the current level of debts outstanding.. Again this is only a temporary measure. but wishes to make some payments.. Enter a paragraph explaining personal circumstances for the financial difficulties.. given their current circumstances. We hope you will be sympathetic to our request as this would greatly relieve some of the stress the client is experiencing. Enter a paragraph explaining personal circumstances for the financial difficulties. when the situation can be reviewed. We request therefore that you give consideration to allowing a suspension of the payments on the account for a period of . using realistic budgeting figures.g. I look forward to a positive response in the near future.. Yours faithfully Your Name Your Job Title Encs Letter Two Offer of a token payment and request to freeze interest. if circumstances have not improved.

We enclose a financial statement prepared with the client. background... Beware if the client owns a property with equity available. Dear Sir/Madam Re: (provide name address and reference number if known) We are currently assisting the above client with their finances.. given their current circumstances. or any realizable assets of value. If you are agreeable to receipt of this payment.. using realistic budgeting figures based on their current circumstances. per month. We appreciate this is a low offer. This is usually used when there is no available income and the personal circumstances are unlikely to improve in the foreseeable future. the administration costs of collecting the debt. Thus we are unable to make a constructive . We would not normally make an offer of payment in these circumstances. but it is the maximum the client can afford to pay regularly at this time. This also shows the level of debt outstanding.. as the creditor may decide to take court action instead of agreeing to the write off request. We would be grateful for your kind consideration of this offer and would request that you freeze the interest and charges on the account. especially if this relates to their illness. and any events that have led to the problem occurring. Enter a paragraph explaining personal circumstances for the financial difficulties. such as their age. would be higher than the payments received. so that the situation does not deteriorate further. It is worth pointing out in your letter that clients with some medical conditions would find it difficult to maintain a regular payment.. using realistic figures. I look forward to your response in the near future. It is very important in this sort of letter to include full facts regarding the client. medical condition. but as a gesture of goodwill. and enclose a signed authority for your records. and that if the payment being offered was very low. it would be helpful if you could supply a payment book (or standing order or direct debit form if appropriate). family situation. You may also need to give reasons for any high expenditure on the financial statement. We enclose a financial statement prepared with the client.. As you can see the client is finding it difficult to meet their basic needs. You can see from the information that the client is finding it difficult to meet even their basic needs at this time. especially if this relates to their illness.statement. the client wishes to offer a token payment of £. Yours faithfully Your Name Your Job Title Encs Letter Three Request a write off of the full debt. This also shows the level of debt outstanding.

Given the erratic nature of the client's illness. This shows goodwill. Yours faithfully Your Name Your Job Title Encs Letter Four Offer of pro-rata payments and request to freeze interest. but we feel that this course of action would greatly relieve the anxiety and distress that the simple existence of these debts are causing. Enter a paragraph explaining personal circumstances for the financial difficulties. This is used when there is available income that is being offered to all creditors based on a fair and equitable distribution. it would be wise for them to make the payments whether or not the offer is accepted. especially as they cannot foresee a time when they will be in a position to pay. as this is the way a court would administer an administration order. However. In these circumstances we would usually suggest that the interest be frozen and payments suspended for a while. We acknowledge that this is an exceptional request. Give details of nature of ill health and how these debts are impacting on the ill health-enclose medical evidence if available. Be careful that the offer is sustainable for the foreseeable future. were any monies available. (See preparing a personal budget for an explanation of how to work out these amounts). with circumstances very unlikely to improve. and enclose a signed authority for your records. We ask that you give this request your most sympathetic consideration. as clients can be tempted to offer more than they can afford due to fear of creditors. and thank you for your attention to this request. with a review of the finances at a later date. in this instance as I have highlighted.suggestion as to how an offer of payment can be made. Given these harsh circumstances we would ask that you give consideration to writing off the outstanding debt. If the client can only afford the payments being offered. Dear Sir/Madam Re: (provide name address and reference number if known) We are currently assisting the above client with their finances. it is also doubtful that they would be able to maintain a regular payment. We look forward to hearing from you soon. It is widely accepted by creditors. the position now and for the foreseeable future appears bleak. and will be reviewed favorably if the creditors insist on taking further action through the courts. However some creditors push for higher payments. .

with the creditor agreeing to write off the remaining debt. Once a figure has been decided on.g. a relative or friend. This method.g. as this could prevent further attempts to recover the remainder of the balance at a later date. and it would be advisable to keep copies of the letters. Without Prejudice Dear Sir/Madam . Should circumstances improve we have advised the client that the payment should be reviewed. and allow the client to move on. Enclose a summary of this calculation with the request. and we look forward to a positive response in the near future. It is important to receive written confirmation of their acceptance of the offer before making any payments. and we will contact you accordingly. furniture. to achieve a better result it may be advisable to do this via a third party e. family member paying off debts etc. standing order/direct debit form (delete as appropriate) so that the payments can commence as soon as possible. from sale of a property or asset. It is worked out the same way as you would calculate an equitable distribution. It is possible to offer creditors a proportion of the amount owed in full settlement of the outstanding debt. the money is split between all creditors on a pro-rata basis. It would be helpful of you could provide a payment book. using realistic budgeting figures based on their current circumstances. You do not have to offer the full amount you have received if some of the funds are required for other purposes e. We are offering a payment to all creditors based on an equitable distribution of the surplus income available. We appreciate this represents a reduction in the contracted repayments. or from a backdated payment of benefit or Disability Living Allowance. We hope you will give kind consideration to this offer. if the creditors agree to accept the amounts offered. If you are going to offer a full and final settlement. Yours faithfully Your Name Your Job Title Encs Letter Five Offer of full and final settlement It may be that a lump sum is available e. We enclose a financial statement prepared with the client. but at this time we believe this is the best offer the client can afford to maintain regularly. redecoration etc. It would be helpful if you would give consideration to freezing the interest so that all payments received are used to reduce the debt.g. Make sure the words ' Without Prejudice ' are put at the top of the letter. especially if this relates to their illness. can finalise the situation.You may also need to give reasons for any high expenditure on the financial statement.

... Enter a paragraph explaining personal circumstances for the financial difficulties. you will mark any entry on the credit reference file relating to the account as satisfied in full. I enclose a summary of the amounts being offered to each creditor. We also request that. This offer is made on the clear understanding that. especially if this relates to their illness We enclose a financial statement prepared with the client. You may also need to give reasons for any high expenditure on the financial statement. given their current circumstances. can be raised via a third party. If this proposal is acceptable to you I would be grateful if you would confirm this in writing.Re: (provide name address and reference number if known) We are currently assisting the above client with their finances. In order for a creditor to take action in a court to recover a debt in court they need to be able to produce an executed copy of the Consumer Credit Act agreement. neither you nor any associate company will take any further action to enforce or pursue the debt in any way whatsoever and that you will release the client from liability. You would receive £.. Thus at the present time we are unable to make a constructive suggestion as to how an offer of payment can be made. However a sum of £. Enter a paragraph explaining client's personal circumstances for financial difficulties.. This also shows the level of debt outstanding.. and enclose a signed authority for your records.. using realistic figures.. As you can see the client is finding it difficult to meet their basic needs.. You may also need to give explanations for any high expenditure .. and thus this letter points out that legal action cannot be taken... and enclose a signed authority for your records. Catalogue companies generally never ask clients to sign any agreements. and enclose a payment slip so that we can make the payment without delay... I look forward to hearing from you soon. (give details of third party and their relationship to you if possible) and this is being offered as an ex-gratia payment in full and final settlement of the account. Yours faithfully Your Name Your Job Title Encs Letter Six Request a write off from a catalogue company.. if accepted. Dear Sir/Madam Re: (provide name address and reference number if known) We are currently assisting the above client with their finances... if accepted.

. Dear Sir/Madam Re: your reference : Since making the above agreement with you. relationship breakdown.... We have prepared a financial statement... left to pay my credit commitments... and thank you for your attention to this request.. You may also need to give explanations for any high expenditure especially if this relates to their illness. I would also ask that you consider freezing interest and charges so that any payments I make will be utilized to reduce the debt in full. We ask that you give this request your most sympathetic consideration. and of course if my circumstances do improve I will contact you again. which is enclosed. ill health etc. and for the foreseeable future.difficulties. Yours faithfully Your Name Your Job Title Encs Letter A Offer of a pro-rata payment.. We understand from our client that you are pursuing them for payment of a debt. I am unable to afford the agreed monthly repayments at the present time. and I am asking all creditors to accept lower payments.. We look forward to hearing from you. and is signed. appears bleak with circumstances very unlikely to improve... I hope you will give consideration to my personal circumstances. The offers I am making have been worked out on a pro-rata basis. If you are unable to produce signed documentation. I enclose a personal budget sheet which shows my present financial position. income reduced. As you can see the client is finding it difficult to meet even their basic needs... Your agreement to write off the debt would greatly relieve some of the stress and anxiety that the simple existence of the debt is causing the client. This letter is designed to be used by a debtor who wishes to write to a creditor.. Highlight how the debt is impacting on their illness.. give details of your personal circumstances which have led to the problems e.g. losing a job.. If you have the required documentation. per month/week. This is due to . . my circumstances have changed. See notes on letter four for further details. I am able to offer you a payment of £. The position now.... As you will be aware it is a requirement of the Consumer Credit Act (sections 60 & 61) that any agreement is set out in a particular format. As you can see I have only £.. We are thus requesting that you consider writing off the outstanding debt. the agreement would be unexecuted and therefore unenforceable in court.. We also understand from our client that he/she has never signed an agreement with you to cover this debt.. we ask that this is produced. who cannot foresee a time when they will be in a position to pay.

. losing a job. my circumstances have changed. I would be grateful if you would send me a payment book/standing order/direct debit form (delete as appropriate) to make it easier to pay you. This letter is designed to be used by a debtor who wishes to write to a creditor.. give details of your personal circumstances which have led to the problems e. I thank you for your attention to this matter. Dear Sir/Madam Re: your reference : Since making the above agreement with you. Yours faithfully Letter C Unable to offer a payment. so I would be grateful for a reply at your earliest convenience.If you are agreeable to my offer.. my circumstances have changed. Yours faithfully Letter B Offer of token payments. and of course if my circumstances do improve I will contact you again. please forward a payment book/standing order/direct debit form (delete as appropriate) I hope you will give kind consideration to my personal circumstances. This letter is designed to be used by a debtor who wishes to write to a creditor. I would like to start the payments as soon as possible.. I view of my circumstances I ask that you accept a token offer of £1 per month to be reviewed in six months. I would also ask that you consider freezing interest and charges so that the debt does not increase further. As you can see I have no money left to pay my credit commitments. relationship breakdown. and I look forward to hearing from you soon. I enclose a personal budget sheet which shows my present financial position.. I am unable to afford the agreed monthly repayments at the present time. income reduced. This is due to ... I am . See notes on letter two for further details. Dear Sir/Madam Re: your reference : Since making the above agreement with you. ill health etc. In order that I can make these payments easily.g. See notes on letter one for further details.

give details of your personal circumstances which have led to the problems e. I hope you will give kind consideration to my personal circumstances. I would also ask that you consider freezing interest and charges so that the debt does not increase further.2011 . I thank you for your attention to this matter.co. relationship breakdown. It is important that you find the right solution for your circumstances.uk | tel: 0800 074 6918 . At the moment I do not have enough to meet even my basic needs. I view of my circumstances I ask that you allow me to cease payments for a period of six months.The UK Insolvency Helpline . income reduced..co. will be possibly back in work in 6 months etc.g. Please note that failure to adhere to a debt solution could result in further financial problems.g. Yours faithfully Copyright © 1999 ..All Rights Reserved IVA | BANKRUPTCY | DEBT ADVICE | REFUSED A LOAN | GET DEBT HELP | DEBT CONSOLIDATION | DEBT HELP | DEBT MANAGEMENT | CHEAP LOANS The UK Insolvency Helpline offers confidential and non-judgmental advice and will put you in touch with a licensed professional to arrange your debt solution. You can also view a free publication from The Insolvency Service In Debt? Dealing With Your Creditors which provides an overview of some of the debt solutions that may be available. fees may be payable depending on the solution provided. Please note that your home may be repossessed if you do not keep up with repayments on a mortgage or secured loan. web: www... Please note that whilst initial advice is free. losing a job..insolvencyhelpline. As you can see I have no money left to pay my credit commitments.. This is due to .uk | email: info@insolvencyhelpline.. and I look forward to hearing from you soon. If your circumstances are likely to be better in near future give details here e. ill health etc.unable to afford the agreed monthly repayments at the present time. I enclose a personal budget sheet which shows my present financial position. and of course if my circumstances do improve I will contact you again immediately.