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How to negotiate with creditors

Communicating with creditors


If you are struggling to make payments, contacting your creditors directly is often an important first step. Many creditors have processes for dealing with financial hardship.


Before you make contact


Some things that people in similar situations sometimes find helpful before reaching out:


1. **Work out your budget** — Use our Budget Calculator to understand your income and essential expenses

2. **Identify your priority debts** — Focus on debts with the most serious consequences first

3. **Know what you can afford** — Having a realistic figure ready for what you can offer per month


What to say


When contacting a creditor, it may help to:

  • Explain that you are experiencing financial difficulty
  • Be honest about your situation
  • Tell them what you can afford to pay each month
  • Ask if they can freeze interest or charges
  • Ask about any hardship policies they may have

    • What creditors may offer


    Many creditors have options for people in difficulty, including:

  • **Payment plans** — reduced monthly payments over a longer period
  • **Interest freezes** — stopping interest while you repay the balance
  • **Payment holidays** — temporary breaks from payments
  • **Reduced settlements** — accepting less than the full amount (this is less common)

    • Tips for the conversation


  • You can write instead of calling if you prefer — use our Hardship Letter Generator
  • If calling, ask for the name of the person you speak to and request confirmation in writing
  • Keep notes of every conversation
  • If you feel the creditor is treating you unfairly, you can complain to the Financial Ombudsman Service

    • Tools that may help

    Generate a Hardship LetterCalculate Your BudgetGet a Call Script

    Frequently asked questions

    Do I have to negotiate with creditors?

    You are not legally required to negotiate. However, many people find that reaching out early can lead to more flexible arrangements and may prevent the situation from escalating.

    Will creditors always agree to reduced payments?

    There is no guarantee, but creditors are required to treat customers fairly and many have hardship policies. Providing a clear budget showing what you can afford typically strengthens your position.

    Should I use a debt management company?

    There are free alternatives that provide the same help. Organisations like StepChange (0800 138 1111) and National Debtline (0808 808 4000) offer free, confidential debt advice and can negotiate with creditors on your behalf.

    This guide provides general information and is not financial or legal advice. For personalised guidance, consider speaking to a qualified advisor such as StepChange or Citizens Advice.