Dealing with Creditors

Dealing with Creditors

www.RemoveDebt.org

Negotiating with priority creditors

If you are in debt, it is important to keep in contact with the people you owe money to (your creditors). If they are unaware you are having financial difficulties, they will assume you don't want to pay and start taking action to have their debts repaid. It is rarely too late to start negotiating and most creditors will appreciate your contacting them.

There are two types of creditors: priority creditors and non-priority creditors. Priority creditors are those who have the strongest remedies for ensuring they are paid (enforcing the debt) such as making you homeless, disconnecting your gas or electricity supply, or, in some cases, having you imprisoned. Although non- priority creditors can take court action to recover their debts, you cannot be imprisoned for non-payment. For information on dealing with non-priority creditors, see fact sheet

The following rules will help you in your negotiations:-

•don't ignore the problem. It won't go away;

•contact your creditors as early as possible and explain why you are in debt;

•if the first person you speak to is unhelpful, ask to speak to someone more senior who may be more willing to agree to your proposals;

•work out your income and expenses so that you know how much you have to offer to your creditors. For information on how to do this, see fact sheet Basic debt advice

•make sure you tackle your priority creditors first (see below for more information);

•don't borrow money to repay your debts. This is likely to increase your debt and may put your home at risk. If you are unsure about what to do, contact your local CAB.

•don't ignore creditors' letters or phone calls. Always answer letters and don't give up trying to make an arrangement even if a creditor seems difficult;

•keep copies of all letters and make a note of all telephone calls or meetings, including the person's name and what was agreed;

•always reply to court letters within the time limit and take
advice if you're unsure how to complete court forms.

www.RemoveDebt.org