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Dealing with debt? Here’s our helpful advice for talking to creditors

20 December 2022

Are you worried about your debt situation?

Are you struggling to make ends meet, and feel like there’s no way out of your financial woes?

If so, you’re not alone. The current cost of living crisis means more and more people are struggling with debt. At the same time, though, even if you’re struggling to make ends meet, that doesn’t mean your debt problem isn’t solvable. It might not be easy or quick to resolve, but there’s always a route -and the earlier you tackle it, the easier it is to deal with.

Dealing with debt can be a stressful and intimidating experience for many of us. The thought of having to pay back our loans, credit card bills and other debts is enough to make us want to throw in the towel and give up on ever being financially secure. But don’t lose hope! There are plenty of ways to take control of your debt so that it doesn’t have to control you.

This guide will walk you through the steps you need to take in order to talk to your creditors and feel back in control of your financial situation.

Prepare In Advance

Before you speak with your creditors, you need to prepare for the conversation. Get all of your relevant paperwork together relating to your bills and make notes of your account balances and numbers, the due dates of your payments, your monthly payment amounts, the total amount that you owe, and your creditors’ details.

Prioritise your bills in order of importance. Clearly your rent or mortgage payments should be at the top of the list, with things like TV package subscriptions at the bottom.

Next, you’ll need to decide how you’ll contact your creditor. Will you call, use live chat, or write an email? Whichever you choose, take action straight away rather than delaying. Make sure to have paper and a pen ready so you can make notes during your conversation and practice what you’re planning to say in advance before picking up the phone.

If you’re planning to contact your credit via email, write some practice messages first to make sure you don’t miss anything important out.

Speaking To Your Creditor

Once you contact your creditor, it’s important to explain your situation clearly and to ask for the help and support that you need. Let your creditor know that you’re unable to make your payment and the reasons for being unable to pay, then ask if you could come to an arrangement with them.

Make sure you mention any important points such as disabilities, mental health problems, or vulnerabilities such as being a carer, older person, or single parent, as you may be entitled to even more support.

Weighing Up Your Options

When you speak to your creditor, they may give you a few different options to deal with the situation. In some cases, a payment holiday may be offered, in others, you may be offered a change of tariffs or products, and in many cases, flexible repayment plans are the preferred solution.

It’s important to have a clear understanding of what you’re being offered, what the implications may be for you, and that you’re confident of your ability to pay before agreeing to anything. Make sure, too, to find out if there will be any impact on your credit rating.

Coming To An Agreement

If you’re happy with your arrangement, ask for it in writing so that you can go through the details carefully. If you spot any mistakes, you should contact your creditor again to discuss the discrepancies between what was discussed and what is in the agreement.

Once you’ve reached your agreement, make sure to stay in regular contact with your creditor and let them know if your financial situation changes, and if you find you’re unable to make future payments, keep your creditor in the loop to avoid problems from mounting up.

Talk to the experts

Step Change Debt services is a charity with services available across the UK. Online support is also available via its debt advice tool where you can create a budget and get a personal action plan with practical next steps.

National Debtline provides free advice and resources to help people deal with their debts. Advice is available over the phone, online and via webchat.

Citizens Advice provides full debt and consumer advice service. Many bureaux have specialist caseworkers to deal with any type of debt, including repossessions and negotiation with creditors.