Here is a selection of templates which will be useful when dealing with creditors.

Although I have called them Letter A, Letter B etc for ease of reference, they are in no particular order, and are in no way intended as a step-by-step guide - you will need to use the letter appropriate to your needs and edit it where indicated in red.

The letters are as follows:

• Letter A - Ask your creditors to hold action on your account
  
• Letter B - Ask your creditors to accept pro rata offers of payment on your debts
  
• Letter C - Ask your creditors to accept a token payment or no payment on your debts
  
• Letter D - When a creditor refuses your offer of payment
  
• Letter E - When a creditor refuses to freeze interest on your account
  
• Letter F - When a creditor has turned down an offer of payment, interest is still being added, and you want the creditor to take you to court.
  
• Letter G - When creditors have turned down an offer of payment, interest is still being added but you don’t want to go to court
  
• Letter H - When a creditor asks you to agree to a voluntary charge against your home
  
• Letter I - Request for a stay of execution in the High Court
  
• Letter J - Full and final settlement for any debt
  
• Letter K - Ask creditors to write off the debt due to your circumstances
  
• Letter L - Ask your creditors to reconsider if they refuse to write off the debt
  
• Letter M - Dispute your liability for a debt where a creditor has not contacted you for over six years
  
• Letter N - Ask your creditor for a copy of your credit agreement under the Consumer Credit Act 1974
  
• Letter O - Mortgage shortfalls: Breakdown of balance owed
  
• Letter P - Mortgage shortfalls: Please write off the debt
  
• Letter Q - Mortgage shortfalls: Full and final settlement letter
  
• Letter R - Mortgage shortfalls: Lender should not pursue under CML policy
  
• Letter S - Inform your creditor that you are terminating your hire purchase/conditional sale agreement

Some of these letters refer to a budget planner. Here is a simple budget planner which you can fill in to work out how much you can afford to offer your creditors, and you can print this and send with the relevant letter:

Excel Budget Planner.xls

Works version (Link not working at present)

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re:− Account/Reference Number 4563210025897412

We are writing to inform you that we are seeking advice and assistance regarding our current financial difficulties.

To this end, we would appreciate if you could hold any action on the above account for a period of at least 28 days.

Also, during this period, could you please freeze interest and/or any other charges accruing on the above account.

We look forward to hearing from you as soon as possible.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re Account No/Reference No:− 4563210025897412

Since making that above agreement with you, our circumstances have changed.

We cannot now afford to agreed monthly payments because ... [your paragraph added here]

We enclose a Personal Budget sheet which shows our total income from all sources, and our outgoings. As you can see we have only £123 per month left for our creditors. The offers we have made to our creditors have worked out on a pro−rata basis, and we have written to all our creditors asking them to accept reduced payments.

In view of our circumstances, please would you agree to accept a reduced offer of £27 per month. If interest or other charges are being added to the account we would be grateful if you would freeze these so that all payments made will reduce what I owe you.

Should our circumstances improve we will contact you again.

We would be grateful if you would send a paying−in book to make it easier to pay you. Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re Account No/Reference No:− 4563210025897412

Since making that above agreement with you, our circumstances have changed.

We cannot now afford to agreed monthly payments because ... [your paragraph added here]

We enclose a Personal Budget sheet which shows our total income from all sources, and the total outgoings of our household. As you can see we have no money left to make offers of payment to my creditors.

In view of our circumstances, would you please accept no payment at present to be reviewed in six months. If interest or other charges are being added to the account, we would be grateful if you would freeze these so our debt does not increase.

Should my circumstances improve we will contact you again.

Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Thank you for your letter of 23−06−2006 concerning the above account.

We are are sorry that you feel unable to accept the offer which we have made. The majority of our other creditors have accepted the offers made to them and we have commenced payments.

We cannot offer you more because we can only afford £775 per month between all our other creditors, and it would be wrong to cease or reduce payments to our other creditors in favour of your company. The offer made to you is on a pro rata basis, as used by the county court.

In the light of the other creditors agreeing to our repayment plan, please would you reconsider our offer. We will be making the payments in line with the offer to your company, on a weekly basis, as a gesture of goodwill.

We look forward to hearing from you as soon as possible.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Thank you for your letter of 23−06−2006 concerning the above account. We are sorry that you feel unable to suspend interest charges on the above account.

The majority of our other creditors have agreed to the offer of payment and agreed to suspend any interest charges still accruing. They have accepted that to continue to charge interest would not assist us in our present financial difficulties, and can only serve to increase our total debt.

As you are aware, we have already paid considerable sums in interest to our account. If interest charges continue, the monthly installments we are paying will not even cover that interest. Also the co−operation of our other creditors who have agreed to freeze interest already would be put at risk.

We would therefore be grateful if you would reconsider your decision not to freeze the interest. This would mean that the monthly payments we make would actually reduce the balance outstanding to your company.

We look forward to hearing from you as soon as possible.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Thank you for your letter of 23−06−2006. We are very disappointed that we seem unable to reach a satisfactory compromise in this case.

As we have already explained, we can only afford £71 per month at the present time, and we feel that it is pointless paying this amount to you only to see the debt increase. We invite you therefore to sue us for the debt, when we shall have the opportunity of offering £71 per month through the courts. In addition, once judgment is granted we understand that further interest will be suspended in any event.

It seems that we can only achieve a reasonable outcome to this matter by allowing the courts to decide, although this will involve us both in extra expense and time wasted with court proceedings.

The offer of £71 per month plus suspension of interest is of course still open to you to accept.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Thank you for your letter of 23−06−2006. We are very disappointed that we seem unable to reach a satisfactory compromise in this case.

As we have already explained, we can only afford £71 per month at the present time. This is the only realistic payment proposal bearing in mind the enclosed personal budget sheet.

You have stated in correspondence your intention to commence proceedings in the county court against us. The commencement of legal proceedings under such circumstances could be counter to the ‘Overriding Objectives’ of the new Civil Procedure Rules. You will be aware that the Overriding Objectives underpin everything the court does. Moreover, paragraph 4 of the Protocols Practice Direction states that in cases not covered by an approved pre−action protocol, the court will expect the parties “to act reasonably…….. In trying to avoid the necessity for the start of proceedings”.

We would suggest that your refusal to accept our offer could be viewed as unreasonable and we would ask the court to consider this matter with reference to the Overriding Objectives.

The offer of £71 is of course still open to you to accept.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Further to our meeting of 23−06−2006, we are writing to confirm that we are not prepared to agree to a voluntary charge on our property as requested by you, in respect of the debt to your company.

As already discussed with you, we have a number of creditors, apart from yourselves. To allow you to obtain a charge on our property would be to grant your company preferential status, and could therefore prejudice the rights of our other creditors, all of whom have already accepted our proposals without any request for additional security.

In addition, whilst it is not our intention in any way to be unco−operative, we are not prepared to allow a debt which is currently unsecured to become a secured debt and therefore put our home at risk.

As you will see from the Personal Budget which we have already submitted an offer to your company is still open for you to accept. This is based on our income and expenditure, and a pro rata of equitable distribution of available income. We would therefore hope that you will follow the lead taken by the other creditors, and accept our proposals without attaching unnecessary conditions.

Furthermore, whilst of course we wish to avoid county court action, we are aware that were your company to pursue this debt through the county court, the court would look at our circumstances and order a level payment which we could afford, and in addition would freeze interest on the account.

We would bring to your attention that following the case of Mercantile Credit Ltd−v−Ellis and others in the Court of Appeal on March 11th 1987, if we were to maintain payments as ordered by the court, your company would be unable to obtain a Charging Order against us. This is further reason why we do not wish to allow a charge on our home.

In light of the other creditors agreeing to our repayment plan, please would you reconsider our offer. We will be making the payments in line with the offer to our company, on a monthly basis, as a gesture of goodwill.

May we take this opportunity of expressing our sincere hope that we can come to a mutually acceptable arrangement, that will allow repayment to our creditors at a level which is affordable based on our circumstances.

We look forward to your co−operation in this matter.

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Case No: 4563210025897412

We are unable to pay the sum claimed immediately and wish to apply for a stay of execution.

We therefore enclose an application and affidavit/witness statement in support of our application for a stay.

You will note that we are able to make a repayment proposal of £ per month and that our first monthly instalment could be made on −−

We have examined our full financial circumstances and believe that this sum represents a realistic amount. We hope therefore that you will be able to accept the repayment schedule.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re: 4563210025897412

We write with reference to the money which you are claming on the above account.

We can confirm that we are unable to offer to pay the money which we owe in full. However, I can raise £775 and I want to offer this as an ex−gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be released for any liability.

We also request that, if accepted, you will make an entry on a credit reference agency file relating to the above account as "satisfied" in full.

Payment can be made within 2 weeks of receiving your written agreement of this offer and method of payment.

We look forward to receiving your reply.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Further to our recent letter, we enclose a copy of our Personal Budget sheet which gives details of our present financial circumstances.

As you can see our outgoings are more than our income and we are experiencing extreme financial hardship. We would be very grateful if you would consider writing off the outstanding debt owing. We have always taken very seriously our financial responsibilities but unfortunately our circumstances are so bad that we cannot realistically maintain payments of any kind.

Please take the following special information into account when making your decision.

Paragraph outlining the special circumstances you have that you want the creditor to take into account.

As you can see our situation is very unlikely to improve in the future, and our continued high debt level may have a serious effect on our physical and mental wellbeing. We would therefore be grateful if you would seriously consider our request for the debt to be written off.

We would appreciate any help you can give us.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

Thank you for your letter, concerning the above account. We are sorry that you are unable to write off the outstanding debt.

The majority of our creditors have agreed to the request that the debt be written off. They have accepted that our circumstances are such that we cannot realistically maintain payments of any kind.

We would therefore be grateful if you would reconsider your decision not to write off this debt. Please take the following information into account when making your decision.

Paragraph outlining the special circumstances you have that you want the creditor to take into account.

We would therefore be grateful if you would give careful reconsideration of your decision not to write off this debt. Should you not feel able to agree to this request, please consider accepting token payments on this account of £1 per month. As you will see from the enclosed personal budget sheet we have no available income and are not in a position to make realistic offers of payment. Additionally we would also ask that any interest and charges on the account be frozen to avoid the situation worsening.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Acc/Ref No 4563210025897412

You have contacted us regarding the account with the above reference number, which you claim is owed by ourselves.

We would point out that under the Limitation Act 1980 Section 5 “an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

We would also point out that the OFT say under their Debt Collection Guidance on statute barred debt that “it is unfair to pursue the debt if the debtor has heard nothing from the creditor during the relevant limitation period”.

The last payment of this alleged debt was made over six years ago and no further acknowledgement or payment has been made since that time. Unless you can provide evidence of payment or written contact from us in the relevant period under Section 5 of the Limitation Act, we suggest that you are no longer able to take any court action against us to recover the alleged amount claimed.

The OFT Debt Collection Guidance states further that “continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statute barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970”.

We await your written confirmation that this matter is now closed and that no further contact will be made concerning the above account after that last letter.

We look forward to your reply.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re:− Account/Reference Number 4563210025897412

This letter is a formal request pursuant to s.77/78 of the Consumer Credit Act 1974. I require you to provide me with a true copy of the credit agreement relating to the above account, together with any other documentation the Act requires you to provide.

I expect you to comply fully and properly with this request, within the statutory time limit. You are reminded that should you fail to comply with my request, the provisions of s.77 will apply.

If it is your view that you are not the creditor, s.175 of the CCA 1974 applies in the case of a simple assignment, and places a duty upon you to pass this request to the creditor. In the case of an absolute assignment, you are a creditor as defined by s.189. If you contend that you purchased the rights but not the duties of any agreement, you are reminded that s.189 of the Act is clear that an assignment is of both rights and duties.

Your attention is drawn to ss.5(2), 3(b),6 and 7 of the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR).

I enclose a postal order in the sum of £1.00, which is the statutory fee. Note that these funds are not to be used for any other purpose.

If you are unable to comply fully and properly with this request, you should confirm this in writing at the earliest opportunity, and certainly within the statutory time limit for compliance, and return the fee.

We look forward to hearing from you.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re:− 4563210025897412

Thank you for your letter call concerning the above account. We do not acknowledge the claim. Please supply us with a full breakdown of the balance claimed under the above account.

In order for us to deal with the matters you raised, we should be grateful if you would supply we with answers to the following points:

• when did the arrears begin?
  
• when was the last payment made on the account?
  
• when was any Possession Order given?
  
• when was the house sold?
  
• what valuations were made on the property before the sale?
  
• what costs were involved in maintaining the property during the period between the repossession and the sale?
  
• how was the house marketed and sold and at what price?
  
• what costs were involved in selling the property?
  
• has a claim been made against the indemnity insurance and how much was recovered?
  
• how has interest been calculated from the start of the arrears?

Please supply us with a full breakdown of the balance claimed under the above account. We look forward to receiving your reply as soon as possible.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re:− 4563210025897412

Further to our recent , We enclose a copy of our Personal Budget sheet which gives details of our present financial circumstances. As you can see our outgoings are more than our income and we are experiencing extreme financial hardship.

We would be very grateful if you would consider writing off the outstanding debt owing. We have always taken very seriously our financial responsibilities but unfortunately our circumstances are so bad that we cannot realistically maintain payments of any kind. We understand that under the “FSA Mortgage Conduct of Business Rules” a lender is not required to recover a mortgage shortfall debt where it is considered unviable to do so.

Please take the following special information into account when making your decision.

Paragraph outlining the special circumstances you have that you want the creditor to take into account.

As you can see our situation is very unlikely to improve in the future, and our continued high debt level may have a serious effect on our physical and mental wellbeing. We would therefore be grateful if you would seriously consider our request for the debt to be written off.

We would appreciate any help you can give us.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re Account No/Reference No:− 4563210025897412

We write with reference to the money which you are claiming on the above account. We can confirm that we are unable to offer to pay the money which you claim we owe in full.

Paragraph outlining the special circumstances you have that you want the creditor to take into account.

However, we can raise £775 and we want to offer this as an ex−gratia payment in full and final settlement of the account, including any subsequent third party claim. This is not an acceptance of any liability for the amount claimed. This offer is made on the clear understanding that, if accepted, neither you nor any associate company, will take any other action to enforce or pursue this debt in any way whatsoever and that we will be released from any further liability.

We also request that, if accepted, you will make an entry on a credit reference agency file relating to the above account as “satisfied” in full. Payment can be made within 2 weeks of receiving your written agreement to this offer and indication of your desired method of payment.

We look forward to receiving your reply.

Yours faithfully

Mr A N Other

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re Account No/Reference No:− 4563210025897412

You have contacted us regarding the amount you claim is owed as a shortfall on the mortgage following the sale of our property.

We understand you are a member of The Council of Mortgage Lenders. As you will be aware, The Council of Mortgage Lenders has the following policy on obtaining repayment of shortfall debts. This applies to all Council of Mortgage Lenders members.

“Lenders are committed to fair and sympathetic treatment of people who have suffered repossession, and accept that individuals should not face long delays before lenders contact them to discuss repayment of the shortfall”.

“From 11th February 2000 lenders who are members of The Council of Mortgage Lenders have agreed voluntarily that they will begin all recovery action for the shortfall within the first six years following the sale of a property in repossession. Anyone whose property was taken into possession and sold more than 6 years ago, and who has not been contacted by their lender about recovering any outstanding debt will not now be asked to pay the shortfall”.

We would point out that the property in question was sold on 01−01−2000. Also the first contact we had from yourselves was by in writing on 23−06−2006. We therefore suggest that under The Council of Mortgage Lenders policy our property was sold more than 6 years and we have not been contacted by yourselves within that time. Therefore we should not be asked to pay any shortfall debt outstanding.

We would also point out that from 31st October 2004 the Financial Services Authority have issued “The Mortgage Conduct of Business Rules” which say that if a lender decides to recover a mortgage shortfall debt they must make sure the borrower is informed of this within 6 years of the date of sale.

We look forward to your confirmation in writing that any outstanding shortfall debt will not be pursued against us any further.

The Loan Company

Company House,

Church Street,

Newtown,

Kent,

R1 7HG

Dear Sir/Madam

Re:− 4563210025897412

Voluntary Termination

We are writing to notify you that we are exercising our right to terminate the Agreement under Section 99 of the Consumer Credit Act 1974.

We understand that we will be liable to you for the amount calculated under the formula in Section 100 of the Consumer Credit Act 1974.

Please send us details of how the vehicle can be returned to you.

Please confirm receipt of this request by telephone to us on 01103 555666.

Yours faithfully

Mr A N Other

When you are in debt, it can be difficult to work out how much to offer your creditors.

Here is a simple budget planner which you can fill in to help work out how much you can afford to offer based on your income and expenditure, taking priority debts into consideration:

Excel Budget Planner.xls